Diesel prices nearing $4/gallon is concerning - KWWL - Eastern Iowa Breaking News, Weather, Closings

Diesel prices nearing $4/gallon is concerning


The pain at the pump continues.  A new report by GasBuddy.com predicts gas prices in Iowa will spike anywhere from 5 to 20 cents a gallon by this coming weekend.  The jump is being blamed on a fire at a Washington state oil refinery. 

Truckers are already feeling the pain as diesel now averages $3.94 a gallon.  And that's pinching budgets at local trucking companies.

Semi-trucks help deliver loads of goods across the country.  Gray Transportation in Waterloo has 125 trucks traveling across the Midwest daily.  And it's getting more costly to fill the 200-gallon tanks of its trucks.

"We're spending over $400,000 a month just on fuel," said Darrin Gray, president of Gray Transportation.

That's more than the company budgeted for fuel costs.  Part of the higher cost is covered by delivery charges Gray imposes on its customers.  And ultimately, those customers often pass that cost on to you.

"It's a trickle down effect.  Everybody pays more.  So you'll see it at the bottom line at the grocery store," Gray said.

And if gas keeps climbing to record highs, at $5 a more or gallon, Gray could be forced to consider cut-backs including staff layoffs.  But the company's doing all it can to avoid that.  One way to help the cause is keeping trucks in tip-top shape.  Every time a truck comes off the road, it ends up in the maintenance garage.

"We plug diagnostic equipment into the truck just to ensure that all the systems are running the way they should and we're not wasting fuel.  With prices as they are, we can't afford to have a truck running inefficiently," said Jeremy Buhr, Gray Transportation maintenance manager.

Gray also contracts with a company that tells its drivers where they can find the cheapest diesel on a given day.  All of which are measures that will become even more critical to save cash as fuel costs keep climbing.

Diesel prices hit an all-time high back in July 2008 at $4.76 a gallon.  Every step in that direction has a big cost.  For example, for every 25 cents fuel goes up, Gray Transportation's costs climb $28,000.

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