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Current Fuel Prices and Inflation


RandyA
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OPINION Statement (not political)

In our area of Virginia #2 Diesel fuel is $5.55 at local stations.  I suspect it is higher along Interstate highways.  I have membership in the Fuel Rebate Programs available at TST, Petro, and a few other affiliate stations.  It currently gives me back $.40 a gallon.  $.10 is withheld for managing the program for RV'ers.  This indicates fleet HDTs that fuel at these stations are paying well over $5.00  per gallon for diesel.

There is a lot of fuss over inflation.  The government doesn't seem to know how to lower it.  In as much that EVER THING we eat, sleep on, live in, wear, along with appliances, medical supplies, and 1000's of more items at one time or another are transported by truck sometime in their supply chain life.  A  big part of inflation and one key to lowering it is to bring the price of diesel down to at least previous levels.  Most big trucks get 6 or so MPG and have fuel tanks that hold 300 gallons (not to mention DEF) - a full fill up is 280 gallons.  With diesel at the previous price of $2.75 a gallon, it would cost $770.00 to completely fill both tanks.  At 6 MPG the range would be 1,600 miles.  The fuel cost per mile would be about $.48 per mile.  Now, let's look at the "new" fuel prices.  Diesel at $5.50 or more per gallon.  $6.50 or more is common in the west.  A fill-up will now cost $1,540.00.  The cost per mile for fuel alone jumps to .$96 per mile - or $1,536 additional per fill-up range.  If this trucker or company is to remain in business the increase in fuel will have to be passed on to the middle-man that sells the goods retail.  Thus the prices of goods go up - as does inflation.  An increase in the price of one item connects to another,

I don't want this post to become political.  So, all I can say is that some sort of effort, law or program to lower diesel prices would pay many times its cost back to the consumer and help to lower inflation.  Like I said, almost everything we consume moves by truck.  We pay for the increased fuel price whenever we buy groceries, appliances, etc.  Think about it.  A significant part of inflation is not just the price a mom pays for gasoline to fill her Honda but what truckers pay for diesel.

While it is out of my realm of understanding price-wise - airplanes use what is basically kerosene, which is a diesel fuel as well.  Again, the increased cost of non-passenger flights must be passed on to the consumer.  Trains have diesel-electric drive systems and burn a  lot of diesel.  Construction equipment burns diesel. Ships and big boats have diesel engines.  Same inflationary situation.  Just the cost of diesel fuel is driving this inflationary spiral.  Yes, the cost of gasoline is also high, and gas prices directly hit the consumer pocketbook.  Diesel prices are basically ignored by the typical consumer that does not have a diesel vehicle.  Most consumers do not know or seem to care about what high diesel prices are costing them.  Big media either ignores the impact or just mentions it in passing.  It's all about gas prices.

It is important that any comments or additions remain non-political or the administrator might quash this thread.

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Fuel prices are all over the place.  Locally, truck stops are around $5.40ish, some smaller gas stations around $4.90, Costco $4.92.

My grandson works ( at McDonalds) about the same amount of minutes per gallon of gas as I did at that age.

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The question, is not what the government should do, the question is what can the government do? The problem is that drilling for oil nearly stopped in 2020, and it was going to take quite some time to recover in the best of scenarios but with the oil companies not so willing to drill for more oil, it will take the country another year or two to get back where we were in 2018 before the drilling for oil started to decline. If you believe in capitalism then you dont want the government to do anything and let the "market" determine prices.

As far as what the government has done in the past during times of fast rising gasoline and diesel prices was to institute wage and price controls that haunt us to this day as well as a 55 mph national speed limit. Does anyone want to return to those days?

 

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16 minutes ago, Av8r3400 said:

This is how the current administration is keeping energy prices artificially inflated.

https://www.foxbusiness.com/politics/biden-admin-cancels-oil-gas-lease-sale-record-high-prices

And of course the oil companies making record profits they're using for stock buy backs instead of increasing production has nothing to do with it. Inflation and shortages are occurring world wide. It's not a uniquely American problem. 

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2 hours ago, Av8r3400 said:

This is how the current administration is keeping energy prices artificially inflated.

https://www.foxbusiness.com/politics/biden-admin-cancels-oil-gas-lease-sale-record-high-prices

Oil companies have plenty of leases they could be drilling on. This move has no effect of the lack new wells being drilled.

https://www.americanprogress.org/article/oil-gas-companies-lying-much-oil-control-u-s-public-lands/

Edited by pjstough
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