Monday, October 10, 2005

It's Not Just What Goes in Your Car

This focus on the gas crisis has, up till now, been on consumer petrol prices and how much it's costing to fill up that wretched Hummer or Suburban. But the next wave of the gas crisis and price hikes are about to hit us where we're not looking--at Wal-Mart; via an article by Robert Bryce in Salon:

 
If Americans are hurting from $3 gasoline, wait till they feel the pain of $4, or even $5, diesel fuel.

We'd better get ready, because it's probably on the way. On Monday, the price of diesel reached an all-time high of $3.21 per gallon, and that may be just the beginning of a long-term rise. Over the next 18 months or so, parts of the country could be seeing shortages of certain diesel blends, and the resultant price spikes. And that means more bad news for American consumers. America's economy runs on diesel; nearly 80 percent of U.S. communities get their goods solely by truck. As diesel prices go up, so will prices for goods at Quickie Pickie, Wal-Mart, and practically every other commercial outlet. Right now, most Americans are focused on sticker shock at the gas pump, but higher diesel prices will mean higher prices for many things we buy, from bananas and Starbucks coffee, to newspapers and orange juice.

Alas, we can't blame Hurricanes Katrina and Rita for the looming price spike. Although 10 refineries (accounting for about 14 percent of domestic capacity) remain shut down from the storms, the coming diesel disaster will be caused by several other things that have nothing to do with the weather. Those factors include stringent new federal regulations on sulfur content in motor fuel, a global shortage of refining capacity, and soaring demand for diesel, both in the United States and around the globe.
 


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