California Truckers Agonize Over Record Diesel Prices

“We’re not making money. Trucking isn’t a stable business,” said Jagroop Singh Deol, a Fresno-based operator managing the steep climb in overhead.

The economics of hauling freight across the United States are deteriorating rapidly, with independent operators and midsize fleet owners in California bearing the brunt of record diesel costs sitting 32% above the national average.

The Crushing Math of Eight-Dollar Fuel

Deol operates two heavy-duty rigs, driving one himself for Amazon while another hauls refrigerated produce to the Midwest and returns with meat, pet food, and auto parts. At the start of the year, filling a tank cost $1,000. Today, Deol pays more than $1,600 per fill-up.

The American Automobile Assn. reported that the average price of a gallon of diesel in California reached $8.35 this week, surging more than 60% over a 12-month period. By comparison, the national average stood at $6.32, leaving truckers paying $3 more per gallon than the average price a year ago.

Avninder Singh, chief executive of Roadies, noted that diesel prices crossing the $8 threshold have eliminated profit margins for his midsize operation based in Bakersfield. His monthly fuel expenditure ballooned to $450,000, wiping out all profits.

“We have literally no margin on it. Like we are running and not making any money,” Singh said, noting that prewar fuel prices sat at $4 per gallon when filling a tank cost $1,200. Now, that same fill-up costs $2,400. “Any American trucking company cannot survive at $8 a gallon. We are literally losing money.”

Policy Pressures and Fractured Workforces

Small-business truckers account for more than 90% of trucking companies in America, according to the Owner-Operator Independent Drivers Assn. These operators typically work load to load and often can’t raise rates when fuel prices spike, unlike their larger competitors.

Lewie Pugh, executive vice president of the Owner-Operator Independent Drivers Assn., pointed out that while big oil companies saw profits nearly double this year, surging diesel costs quickly consumed the minimal margins left for mom-and-pop operators.

Adding to the financial strain, regulatory enforcement and policy shifts have tightened driver availability. Beginning in 2025, the Department of Transportation initiated a crackdown that removed 28,000 drivers for failing English-speaking tests, canceled more than 30,000 licenses that it said were illegally issued to immigrant drivers, and closed hundreds of commercial driver training schools.

Singh reported that canceling the commercial driver licenses diminished the immigrant driver pool, forcing his company to raise wages to attract American drivers from $0.45 to $0.80 per mile. At the same time, Deol noted his own workforce shifted from roughly 200 Indian drivers down to about 20, and he now employs about 230 American drivers whose preference for shorter shifts changed route availability.

Relief Efforts and Trickle-Down Costs

To ease price pressures, Gov. Gavin Newsom permitted the early introduction of cheaper winter-blend gasoline at California stations last week, bypassing the usual end-of-October cutoff for summer blends. Simultaneously, the administration is expanding the use of tax-exempt red dye diesel—typically used in the agriculture industry—for on-road trucks.

On an international scale, the Group of Seven wealthy nations agreed on Oct. 2 to release 100 million barrels of emergency oil reserves over four months to provide temporary relief following the war with Iran.

Despite these interventions, rising transportation costs continue to filter down to consumer shelves. Singh noted that hauling rates for Walmart climbed from $2.50 to $4.50 per mile due to combined fuel prices and labor shortages. Deol warned consumers will soon absorb those expenses directly.

“Your lettuce will go from $3.39 to $3.59 a pound in a week,” Deol said. “You won’t even notice that because you don’t pay attention.”

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