A gallon of regular gasoline costs less than it did a week ago. Experts say it will continue to decline for several more weeks. A gallon of diesel, though, costs more. Why? Because America’s nationwide gasoline supply is growing, but our national diesel supply is getting low.
Lowest Stockpile Since 1993
America has about 25 days’ worth of diesel fuel at the moment, according to the Department of Energy’s Energy Information Administration. That’s the lowest level the national stockpile has seen in well over a decade.
The Washington Post reports, “In the Northeast, where more people burn fuel for home heating than anywhere else in the country, inventories are a third of their typical levels heading into winter.”
Problems Outside U.S. Causing Domestic Shortage
As you’re getting used to hearing, many factors have fed into the problem. In the U.S., refineries ordinarily scale back their production in the fall to conduct needed yearly maintenance activities. Fall is usually the right time of year to do that, as Americans begin driving less with the arrival of cold weather.
But Russia’s invasion of Ukraine has triggered shortages of the fuel worldwide. With prices higher than ever in foreign markets, more of the diesel produced in the U.S. is being exported than we’d see in a normal year.
Few Diesel Passenger Vehicles Still Sold in America
Higher diesel prices don’t affect American car shoppers much, as diesel vehicles have grown rare in American dealerships. Last quarter, around 4% of the light vehicles sold in America were diesel-powered, and almost all of those full-size trucks.
That percentage is likely to shrink further shortly. Ford eliminated the diesel option from its F-150 pickup for 2022. Ram will drop the diesel option from its Ram 1500 lineup in 2023. That leaves the Chevy Silverado and its GMC Sierra twin as the only mainstream full-size pickups with an optional diesel engine.
All three companies still make heavy-duty trucks with optional diesel power.
Diesel Prices Affect Car Prices Anyway
But diesel prices play heavily into the cost of delivering cars. Mandatory destination fees have been rising for most of two years in concert with increasing diesel prices. We may see further increases in delivery fees corresponding with the current spike.
Is There Hope in Sight?
Short-term relief could be on the way. Bloomberg reports, “At least two vessels carrying around 1 million barrels of diesel are due to arrive in New York after being diverted from their original destinations in Europe.”
In recent months, it has grown normal for container ships of fuel to turn around in the sea and head to new ports as fuel prices change in different markets. That phenomenon could help boost U.S. diesel supplies and decrease prices in the short term.
But the Washington Post reports that the White House is considering drastic actions to rebuild the national stock, including “export restrictions that would be unprecedented.”
