Remember this time of the year, last year?
Maybe your memory’s bad, but your wallet sure recalls the hefty fuel prices we all had to cowboy up to last spring and early summer. And while peasants in passenger vehicles also felt pain at the pump, trucking and its diesel guzzling fleets were especially impacted with rising oil prices.
In large part stirred by Russia’s invasion of Ukraine, U.S. gas prices soared at a historical clip throughout the first half of 2022.
The national average price for diesel—trucking’s primary fuel source—peaked at $5.816 per gallon on June 19, 2022. According to motor club AAA, that’s the highest its ever recorded.
Fortunately, we’ve seemed to turn a leaf, however. Diesel, along with all other fuel grades, is steadily seeing its price tag descend over the past several weeks—a sign of improvement that’s sure to shine the leather of trucking’s wallet.
Diesel prices fall for the seventh consecutive week
In addition to AAA’s analysis, the U.S. Energy Information Administration (EIA) data release also reveals average U.S. diesel prices have fallen for seven straight weeks.
This week, starting March 20, the EIA found trucking’s favorite fuel fall another 6.2 cents to $4.185 per gallon. The near two-month momentum of price drops can largely be attributed to plummeting per-barrel oil prices.
Both Brent crude and West Texas Intermediate oils are well below $80 per barrel, with the latter approaching $65 on March 21. Both are far below last year’s levels.
There’s reason to believe the national average could sink south of $4 per gallon before the end of the year. As we speak right now, diesel is already 94.9 cents cheaper than what it was just a year ago.
When breaking it down further, all regions of the country are enjoying these diesel decreases—albeit at different clips.
As of March 20, diesel was down the most in the Rocky Mountain region, coming in 8.1 cents lower to $4.35 per gallon. The Midwest followed it up with 7.3 cents knocked off from last week bringing the region’s total down to $4.021 per gallon.
The New England area of the East Coast also saw a meaningful 7.4-cent slide, however diesel prices still remain comparatively high at $4.657 per gallon. This part of the country absorbed much of the fuel woes of 2022 so it’s great to see it in on the price drops.
While not as big of a dip as its counterparts, the Gulf Coast’s 6.8-cent decrease further helps bring down its regional total to the lowest in the U.S. at $3.93 per gallon.
Like Sir Roger Bannister running the world’s first sub-four-minute mile, the American Gulf is the first region to break a sub-$4 per gallon average in 2023.
California remains above $5 per gallon
Falling in line with its reputation for expensive fuel, the West Coast, particularly California, is our unsurprising king of high diesel prices. Despite seeing declines (3.6 cents this week), diesel on the WC is sitting at $4.862 per gallon. For California alone, it’s getting better (5.2-cent decline this week), but prices are still uncomfortable.
For the faint of heart, we suggest you turn away…diesel remains above $5 per gallon for the Golden State and comes in at an average of $5.260 per gallon.
It’s undisputed. Diesel remains the primary fuel source for trucking. Around 11 million diesel-powered (more than three-quarters of all fleets) trucks are on the road today.
While sexier alternatives, notably battery-electric, are being embraced, newer technologies still have hurdles to climb before they are fully integrated.
For the foreseeable future, diesel is expected to stay the leading power source for trucking’s fleets.
Please contact us if you have any questions regarding this topic or any others in domestic logistics. In addition, stay up to date with weekly headlines from both trucking and rail via our Road Map newsletter.