Diesel Bumps Up 1.9¢ to $3.274 a Gallon
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The national average price for a gallon of diesel rose 1.9 cents to $3.274, the Energy Information Administration reported.
The increase is more than triple the previous two weeks combined (0.4 cent on May 24 and 0.2 cent on May 31).
Trucking’s main fuel now costs 87.8 cents more a gallon on average than at this time in 2020.
U.S. average on-highway #diesel fuel price on June 7, 2021 was $3.274/gal, UP 1.9¢/gallon from 5/31/21, UP 87.8¢/gallon from year ago https://t.co/DYU2rtHhoS #truckers #shippers #fuelprices pic.twitter.com/H8NMZKLUu9 — EIA (@EIAgov) June 8, 2021
The price climbed in all 10 regions included in EIA’s weekly survey released June 7, with the largest being 3.6 cents in the West Coast less California. The smallest gain was seven-tenths of a cent in the Gulf Coast.
The average price of a gallon of gasoline increased 0.8 cent to $3.035, which is 99 cents more expensive than a year ago.
In tracking the four-week trend for products supplied — a marker for demand — EIA on June 9 reported distillate fuel (primarily ultra-low-sulfur diesel used in transportation and to a lesser degree as heating oil) averaged 3.9 million barrels a day, up by 21.6% from the same period last year.
Motor gasoline averaged 9.1 million barrels a day, up by 23.2% compared with the 2020 period.
One fleet executive outlined steps to control the cost of diesel.
“As a fleet, we look to negotiate our cost and pricing structure with our fuel vendors,” Load One CEO John Elliott told Transport Topics. “We ideally try and optimize our spending with a limited number of vendors to increase our spend per vendor and related opportunities for price concessions.”
Load One is a transportation and logistics company based in Taylor, Mich. It uses 70 company drivers and 330 owner-operators. Elliott estimated the company uses 100,000 gallons of fuel per week.
Load One adjusts the fuel surcharge to its customers on a weekly basis, using the weekly EIA reports, he said. “Our owner-operators receive a pass-through on this surcharge.”
U.S. average price for regular-grade #gasoline on June 7, 2021 was $3.035/gal, UP 0.8¢/gallon from 5/31/21, UP 99.9¢/gallon from year ago https://t.co/xfitGFbNnd #gasprices pic.twitter.com/XnJ1QCg7sX — EIA (@EIAgov) June 8, 2021
Company trucks are spec’d for fuel efficiency, from the powertrain to aerodynamic features. All come with battery-powered auxiliary power units to reduce fuel use, Elliott said. “We also monitor driver performance and equipment performance to look for anomalies.”
He said Load One was not looking, at this time, at any alternative fuels like renewable diesel.
“We don’t fuel on site,” he said. “We do use biodiesel but that is really based on what the truck stops we use offer.”
In April, TravelCenters of America announced the formation of eTA, a new business unit to seek to deliver sustainable and alternative energy to the marketplace, including renewable diesel, biodiesel blends, electrification and hydrogen.
TA, the nation’s largest publicly traded full-service travel center network, includes the TA, Petro Stopping Centers and TA Express brands.
Meanwhile, more fossil-fuel companies are entering the market to make renewable diesel, according to Bloomberg News.
JPMorgan Chase & Co. in October forecast U.S. production capacity for renewable diesel is expected to jump almost sixfold by the end of 2024 to 2.65 billion gallons, or 63 million barrels. The report noted that would create demand for an additional 17 million pounds of feedstock and set up “friction” between biodiesel customers and food customers.
In the meantime, West Texas Intermediate crude futures on the New York Mercantile Exchange closed at $69.96 June 9. Over the past year, WTI prices have ranged between $36.69 and $70.65.
Bloomberg reported oil prices have risen more than 40% this year with support from a robust economic rebound in the United States, China and Europe.
As for which way oil prices, and thus fuel prices, go from here, EIA forecast global consumption will likely increase through 2022, but production will increase more rapidly.
“We expect the increasing global petroleum stocks will limit upward crude oil prices in the coming months and contribute to lower crude oil prices later this year and into 2022,” EIA wrote in a report.
EIA noted that 47% of the cost of the retail diesel price of $3.13 per gallon in April, the latest data, stemmed from the cost of crude oil used in processing.
For gasoline in the same period, crude oil pricing accounted for 52% of the retail price of $2.86 a gallon.
In related news, the United States recovered the majority of the $4.4 million in cryptocurrency ransom paid to the perpetrators of the cyberattack on Colonial Pipeline Co. last month that temporarily halted fuel supplies across the East Coast, Deputy Attorney General Lisa Monaco recently said.
U.S. On-Highway Diesel Fuel Prices
EIA.gov
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