---

Tight Fuel Prices Could Lead to Higher Prices for More than Fuel

18 September 2000

Tight Fuel Prices Could Lead to Higher Prices for More than Fuel, Reports Motor & Equipment Manufacturers Association

    RESEARCH TRIANGLE PARK, N.C., Sept. 14 High oil prices
will soon affect much more than what Americans pay at the fuel pump.  As oil
prices remain high, gas stations are choosing to ease price pressure on the
consumer by subsidizing gasoline prices with higher diesel fuel prices.
According to the Motor & Equipment Manufacturers Association's (MEMA) Diesel
Fuel Price Equity index (DFPI), diesel fuel prices are now 4.5% above the
equity price.  MEMA's DFPI relates gasoline prices to diesel fuel prices.
    Instead of feeling the brunt of high fuel prices only at the pump,
Americans will see the effects in the grocery store, or wherever they buy any
goods transported by truck.  Since each truck in the United States uses
approximately 4,205 gallons of diesel fuel per year, and 1.1 trillion tons of
goods travel across the United States by truck annually, the high price of
diesel fuel will serve to inflate the cost of all goods available to the
public.
    Without a significant decrease in oil price per barrel, the only option
for warding off the inflationary effect of this disparity in fuel prices is to
peg the price of diesel to some percent of gasoline.