‘What you have is economic Darwinism:’ SC trucking, economic experts discuss impact of diesel fuel scarcity & rising prices
COLUMBIA, S.C. (WIS) - South Carolina is under an alert for a possible diesel fuel shortage.
The alert came from Mansfield Energy, a major fuel supply company on Friday, Oct. 28. It also included several other states in the Southeast.
Diesel fuel powers much of the economy, and the U.S. Energy Information Administration reported that as of Oct. 14, 2022, the nation had only 25 days of reserve diesel supply, a level not seen since 2008.
“Our supply chain, the challenges just keep on coming,” Rick Todd, President, and CEO of the South Carolina Trucking Association, said. “It’s one after another.”
Todd said this latest supply chain snag is primarily due to a lack of refining capacity, combined with increased demand that comes with the busy holiday shipping season.
Economic experts say the impacts of this could be widespread, with diesel serving as the major fuel source for the trucking industry and freight transportation.
Joey Von Nessen, a University of South Carolina research economist, called rising diesel prices a “hidden cost” to some.
“In many cases, we don’t necessarily see the importance of diesel in our day-to-day lives directly, but it’s there,” he said.
While most drivers across South Carolina have seen gasoline prices level out, diesel prices continue to climb.
The current average price for a gallon of diesel fuel is just $4.95, according to AAA.
That is 30 cents higher than last month, and almost a dollar and fifty cents higher than a year ago.
Experts project that these supply chain constraints could drive the cost of diesel up another 20 cents in the next few weeks.
Jerry Edwards, a local truck driver, said he is currently paying three times as much for fuel as he was five years ago, which is making it harder to get goods to consumers.
“On top of that, 10 years ago we were going twice as far with that fuel,” he said. “So it’s making it real difficult. I do a lot of loads for BMW and with the way that they pay for the freight, it’s making it really hard on the small business.”
Von Nessen said this issue could drive up the cost of everything, from groceries to online purchases.
“Most of the freight traffic in the United States is based off of diesel fuel and so when there’s a supply constraint and we see elevated prices, that is passed onto the consumer,” he said.
Von Nessen added that this could exacerbate the upward pressure on inflation and lessen the effectiveness of rate increases from the Federal Reserve.
Todd said truck drivers are often scrambling from freight terminal to freight terminal looking for fuel.
“What you have is economic Darwinism and survival of the fittest and hope it doesn’t get that bad,” he said. “Filling up a truck with fuel is like buying gold right now.”
According to the SC Trucking Association, “marginal” truckers who operate on a cash basis and fill up at places like Love’s Travel Stop will be hit hardest by this high price for diesel fuel.
He said more truck drivers could drop out, which could put even more pressure on an already strained supply chain.
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