As prices surge, diesel users feeling the pinch

Diesel price hike ripples through economy CTV’s Tyler Fleming explains the impact of higher diesel fuel prices, making the cost of shipping more expensive.

As gas prices inch toward $2 a litre, diesel has already far surpassed this mark.

Diesel plays a big role in fuelling the economy and the high prices are not helping to slow the surging cost of almost everything.

In Ottawa Tuesday, diesel flowed from the pumps at around $2.34 a litre, around twice the price of last year. For Paul Lalonde, owner of PML Construction, the price to keep nine dump trucks on the road is simply crushing.

“We do septic systems, excavation for new builds, as well as deliver aggregates, and each truck on average uses 160 to 200 litres a day,” says Lalonde. “That’s $20,000 a month and we have payments coming out on these trucks every month—we have insurance payments, we have staff that we need to support, we’re running at a loss and it’s just becoming completely unsustainable.”

Diesel is the primary power source for the global supply chain, fuelling transport trucks, trains and cargo ships, all of which deliver goods, groceries and even gas to pump. So, as its price soars, the chances of consumer products dipping are unlikely.

Driving this surge is short supply, heavy post-pandemic demand, closed refineries and a war, leaving many parts of Europe hungry for gas.

“Diesel, that’s the workhorse of the global economy,” says Dan McTeage with Canadians for Affordable Energy. “And the fact that it’s at $2.30, $2.40 a litre I think It’s a sign of real trouble ahead for all of us. It doesn’t matter what we buy, we’re going to see an inflationary impact the likes of which we have never experienced in our generation.”

McTeague predicts that fuel prices will dip slightly in the short-term but as the May long weekend approaches, and the summer season begins, prices will continue to climb, and he says he doesn’t see an end in sight.

For Lalonde, he says it’s time for government to step-in to provide some sort of solution before businesses are faced with no other choice.

“We just want to cover expenses,” says Lalonde. “If I’m losing $100, $150 a day on a truck, eventually I’m going to have to take a decision to either sell the trucks or get out of the business and do something else.”