"Farm prices, grocery costs, clothing and even fast food are driven by the cost of diesel fuel," said Judy Dugan, research director of Consumer Watchdog. "Consumers are paying a hidden 'diesel tax' on every tomato and ear of corn that they buy for their July 4th parties. The oil companies whose actions caused this price spike have a lot to answer for."
"School districts and fire departments face the choice between tax increases and service cutbacks due to diesel prices," said Hamilton. "Even if the price of diesel drops, all these government entities will be stuck with high-priced fuel contracts that could have paid for new teachers and firefighters."
Much of this year's record gasoline price was due to the price of oil. Diesel's unusual rise above the price of gasoline, however, was caused by industry actions and government's refusal to oversee or regulate a critical fuel, said Consumer Watchdog.
Transportation and manufacturing companies are also increasing their fuel surcharges at record rates. Oil companies have blamed rising world demand for diesel and the cost and difficulty of making cleaner low-sulfur diesel. This study shows how oil companies told a different story only a few years ago: Government accepted oil companies' assurances that they would update their refineries to produce ample supplies of clean diesel in time for a 2006 switchover. They didn't keep that promise.
