Diesel prices up 14.3 cents in the last week, says EIA

Diesel prices saw their single largest weekly price hike since a 14.6 cent increase during the week of June 8, 2009, with a 14.3 gain, bringing the price per gallon up to $3.716, according to data from the Department of Energy’s Energy Information Administration (EIA).

On an annual basis, diesel prices are up 74.1 cents.

Diesel prices have gone up for 13 straight weeks for a cumulative 55.4 cent gain, coupled with prices being above $3.40 per gallon for the seventh straight week. Current prices are at their highest level since reaching $3.659 the week of October 13, 2008.

This week’s price also represents the 22nd consecutive week prices have been at $3 per gallon or more. Prior to the week of October 4, when diesel prices hit $3.00 per gallon, the price per gallon of diesel was below the $3.00 mark for 18 straight weeks.

Oil barrel prices are currently trading at $96.94 on the New York Mercantile Exchange as of press time and could potentially go higher due to violence continued to rage in Libya, which has led to several oil companies suspending or shuttering their operations in the oil-rich North African country, according to a recent Wall Street Journal report.

What’s more, the underlying effect of increasing oil prices on the economic recovery could be severe, as many economists have pointed out that as a general rule of thumb, every $10 increase in the price of a barrel of oil reduces the growth of the gross domestic product by half a percentage point within two years, stated a New York Times report.

And a research report from Avondale Partners analyst Donald Broughton noted that the large spike in crude oil prices caused by increasing geopolitical risk in the Middle East will provide further fuel for the continuing rise in diesel prices.

At a time when freight volumes are showing consistent growth, many shippers have expressed concern about the pace of these diesel increases, explaining that if prices continue to rise at their current pace, it has the potential to hinder growth and increase operating costs, which will, in turn, force them to raise rates and offset the increased prices to consumers.

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