Trucker Predicts ‘a Lot of Bankruptcies’ Due To High Diesel Prices

by Suzanne Halliburton
Andrew Woodley/Universal Images Group via Getty Images

You think filling the tank with unleaded gasoline is getting out of hand. Now, think about the truckers buying diesel, with prices at their highest level in almost three decades.

Talk about extreme pricing. The average price of unleaded gas, nationally, is $4.24 a gallon. Diesel prices are at $5.125.

“The diesel prices. That’s every truck driver’s main expense, it’s diesel,” said independent trucker Michael Whitaker in an interview with Yahoo Finance.

The 4-1-1 On Spiking Diesel Prices

  • The average price for diesel is now $5.125 a gallon.
  • One trucker said it costs $1,000 to fill up his 18-wheeler.
  • Some truckers may spend more than $100,000 a year just on fuel.

Whitaker usually hauls industrial machinery like farming or construction equipment. He knows the trucking industry well since he’s made a living in it since 1998.

“I think we’re going to have a lot of bankruptcies of individual drivers, trucking companies,” Whitaker said.

“If you don’t manage your money, you ain’t going to be in business long,” he added. “When things get rough, you’ve got to have enough money saved up to hold you up through the rough times.”

(GEORGE FREY/AFP via Getty Images)

Diesel Prices Forcing Truckers to Charge More Per Mile

These days definitely count as rough times. Here’s how rough. It cost up to $700 to fill up Whitaker’s truck to start 2022. But since diesel prices are spiking, that same fill-up is $1,000. Whitaker said he used to charge $5 a mile to haul the big equipment. Now, he’s been forced to go up to $7 a mile. Eventually, that cost to haul goods and services is passed to the average consumer. In other words, those Amazon packages will cost more to get to your porch. So when diesel goes up, prices everywhere will increase.

Some businesses already are adding a fuel surcharge to their prices. In theory, that’s supposed to be passed along to the truckers. However, the extra money may never get to the folks who drive for a living.

“We’re making the assumption that they would all be recipient of fuel surcharges. And that’s not necessarily always the case.” Todd Spencer, President of the Owner-Operator Independent Drivers Association told Yahoo.

“Sometimes others, that would be intermediaries, or similar in trucking, they may keep some of it,” he said. “They may keep all of it, and not pass it through. Now that does happen as well. It shouldn’t, but it does,” said Spencer.

We told you that diesel prices are zooming. Here’s some more context. They’re almost $2 more a gallon than this time a year ago. Now, for some extreme numbers. Spencer said a trucker will use up to 20,000 gallons a year. You don’t need to do the math all the way through to see how much of a cost that is for truckers.

“So looking at those costs, you’re talking about $90,000-$105,000 a year just on fuel,” Spencer said.

Oil Dropped in Overnight Trading

In overnight trading into Thursday, the price of oil dropped by about 5.5 percent. West Texas Intermediate, the U.S. benchmark, was trading at about $102 a barrel. President Joe Biden is expected to announce Thursday plans to release one million barrels of oil per day from the nation’s Strategic Petroleum Reserve.

Diesel prices have stayed higher than regular unleaded since 2004. It costs more to refine oil into less polluting diesel fuel. And, federal taxes on diesel are six cents per gallon higher than on unleaded.