Monday, September 12, 2005

High Diesel Prices lead to theft

The market for diesel fuel seems to have exceeded its equilibrium value. While demand is still high enough to justify prices, those prices are beyond what people are willing to pay--leading to an infortunate "externality"--theft.

On a recent morning, almond grower Scott Hunter ventured into the predawn darkness to discover that rustlers had made off with 900 gallons of diesel worth more than $2,700. It was the fourth time in recent months that thieves had raided the tanks at Hunter's Merced County farm.

To keep the thieves out, Hunter had installed chain-link fences, razor wire and bunkerlike concrete structures around his fuel pumps. But they cut a hole through his fence, escaping with the diesel.

Diesel prices hovered around $3.25 a gallon last week, $1.11 more than at the same time last year, according to the U.S. Energy Department.

Authorities say these record fuel prices have resulted in brazen diesel rustling from trucks and tanks in many rural areas of the state — especially unguarded farms in the Central Valley.

Other kinds of fuel thefts are increasing. Many people are rushing to buy locking gas caps after reports that motorists were siphoning gasoline from neighbors' cars.