The U.S. average retail price of diesel fuel rose 1.4 cents to $3.171 a gallon, the seventh straight week the trucking industry’s main fuel has increased in price, according to the weekly report from the U.S. Department of Energy’s Energy Information Administration released May 7.
Diesel now costs 60.6 cents more per gallon than it did one year ago.
The average price of diesel rose last week in all regions nationwide. California remained the most expensive place to buy diesel, with a gallon going for $3.863, followed by the West Coast at $3.640. California has seen a gallon of diesel increase 93.6 cents in the past 12 months. The Gulf Coast had the lowest price at $2.955 a gallon, EIA reported.
Gasoline fell a tad, dropping from an average price of $2.846 a gallon April 30 to $2.845 on May 7. The average price of a gallon of regular gas has gone up 43.5 cents from one year ago.
Projections on fuel prices for the rest of this year were quickly revised upward by EIA, and futures traded higher after President Donald Trump’s decision to take the United States out of the 2015 international accord with Iran.
The agreement curbed the oil-rich country’s nuclear enrichment program while lifting sanctions on its exports. The U.S. Treasury Department announced the United States would reimpose the sanctions after certain 90-day and 180-day wind-down periods.
Iran is the fifth-largest oil-producing nation in the world, pumping out nearly 4 million barrels a day in 2016, according to EIA.
Uncertainty sent crude oil futures trading above $70 a barrel on the Nymex for the first time since November 2014. Futures closed at $66.20 a barrel as recently as April 16.
EIA revised its outlook on the price of diesel this summer to $3.17 a gallon, up 25 cents, or nearly 9%, from the $2.92 it predicted in April. The agency’s short-term outlook sees diesel selling for $3.19 a gallon in September then falling to $3.13 in December.
Fleets are keeping an eye on the steady rise.
“In the last 12 months, there’s been a 50-cent-net-cost-per-gallon increase, or about 15%. We definitely see it,” said Paul Bunn, chief accounting officer with Covenant Transport Services, a Chattanooga, Tenn.-based truckload carrier.
For now, the increase is not a burden, but Covenant is putting more emphasis on idle management with its drivers, Bunn said.
However, a rise to $3.50 to $4 a gallon would cause the firm to re-evaluate its use of auxiliary power units and possibly add to trucks trailer or side skirts and other technology that makes them more aerodynamic, Bunn said.
Covenant ranks No. 47 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
APUs allow drivers to control the climate in their sleepers and can be powered by a diesel engine or by battery.
For oil, EIA predicts crude oil spot prices will average $71 a barrel for the rest of 2018, an increase of $7 a barrel, or 11%, from the agency’s outlook last month.
Also, the agency revised its outlook for gas prices at the pump this summer to $2.90 a gallon, up 17 cents from $2.73 a gallon.