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The price of diesel fuel has increased by more than 40 percent since Thursday, prompting the state's largest trucking group to warn that the staggering hikes could cause many operators to park their rigs rather than lose money.

The cost of heating oil, which is very similar to diesel, has also risen by as much as 50 percent over the past two weeks in certain parts of the Northeast. However, because residential consumers typically don't fill up their tanks more than every six or eight weeks, many have been insulated from the recent increases.

Truckers, on the other hand, have watched as diesel prices increased daily -- sometimes by as much as 15 cents in the span of only 12 hours.

"If the price of diesel continues at these unprecedented levels, New York's economy will head straight downhill," said William G. Joyce Jr., president of the New York State Motor Truck Association Inc.

The Albany-based group sent letters to Gov. George E. Pataki and state Attorney General Eliot Spitzer on Monday, asking their offices to investigate the cause of the increases and "eliminate any possibility of price gouging."

The association released figures indicating that the price of diesel in the Northeast jumped from $1.449 per gallon on Thursday to $2.059 on Monday. Joyce said the increases were largely confined to the Northeast.

"A 60-cent-per-gallon increase in a matter of days in our state and region and not in the rest of the country is inexplicable and inexcusable," said Joyce.

Meanwhile, a Republican congressman from Saratoga Springs urged President Clinton on Monday to investigate an "unprecedented" rise in heating oil prices and to release $300 million in emergency heat
See Fuel Page A5
Fuel: Recent cold, OPEC fears
blamed in part for price hike
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ing funds for poor families to pay their fuel bills.

Rep. John Sweeney said the price spike was unprecedented for an economy in peacetime.

But local petroleum distributors said two factors have caused oil prices to soar to nine-year highs: the cold snap that has blanketed New York and several other Northeastern states and speculation that the Organization of Petroleum Exporting Countries will continue production cuts that have curtailed crude supplies. The era of cheap oil began its gradual demise last March when OPEC cut production by 4.3 million barrels a day.

When Robert L. Newman, an official with Western New York's largest independent petroleum distributor, was asked to comment about the recent surge in prices, he summed it up in one word: "Ouch."

Newman is president of Noco Express Shops, a division of Noco Energy Corp. The company operates 50 convenience stores and service stations and also services nearly 35,000 home heating oil accounts.

"Speculators are driving up prices very quickly on the spot market," said Newman. "I've only seen these kind of increases two other times in my 20 years in the business. The first time, I was a lowly gas station attendant in the 1970s. The second time was during Desert Storm in the early '90s."

Bernard Kiefer, a spokesman for Petro USA, which operates three gas stations, including a truck stop on Ohio Street, concurred that suppliers have been blaming the recent surge in diesel prices on the frigid weather.

"We're hoping that once this cold snap breaks, things will improve," Kiefer said.

Another official with Petro USA said that based on information the company received from suppliers late Monday, the price of diesel appeared to be leveling off.

Industry analysts from the Independent Petroleum Association of America, a Washington-based organization that represents 8,000 producers, did not return calls to comment.

Representatives from the trucking industry said they don't buy the argument that OPEC's reduced production and the cold spell have been solely responsible for the hikes.

"Something is seriously out of whack," said Joyce. "There's no great supply (of oil), but there's no shortage either. When diesel increases by over 60 cents a gallon in four days, something is wrong."

Hazmat Environmental Group, a Buffalo-based trucking company with a fleet of 100 power units and 200 trailers, has been feeling the effects of the price increases. President Dennis Dintino said the price of diesel has gone up by as much 15 cents per gallon in a 12-hour period.

"I can't help but think it's the fuel companies. If there's an opportunity to raise prices by two cents, they'll usually raise it by 12 cents. There's just no logical reason for this magnitude of an increase."

To some extent, many truckers have the ability to pass along fuel price increases to customers: Some have hauling contracts that allow for fuel price escalators. However, these clauses are tied to the national average price of diesel, and Joyce said that because increases have been more pronounced in the Northeast, the escalator clauses will not shield truckers from the entire impact.

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