Although the cost of diesel fuel has modestly retreated since a recent November high, experts are forecasting fuel could exceed the $4 per gallon mark not experienced since 2014.
During the first week of 2022, passenger vehicle gasoline stood at a national average of $3.295, and truck diesel hovered around $3.613 per gallon. Over the previous 12 months, diesel surged by nearly a full dollar per gallon from January, 2021, when the national average was $2.64. Fuel experts at Gas Buddy recently predicted that gasoline is expected to spike to over $3.79 by May, and diesel will likely follow suit.
“We could see a national average that flirts with, or in a worst-case scenario, potentially exceeds $4 a gallon,” the head of petroleum analysis at Gas Buddy Patrick De Haan reportedly said. “The economy is hot. Demand has come roaring back. But supply is still catching up after getting cut greatly in 2020.”
When adjusting for the typically higher price of diesel, owner-operators and fleet outfits can anticipate paying more than $4 per gallon on average. That being said, Central Atlantic states and New England usually experience slightly higher prices at the pump. Truckers in California, by contrast, typically pay more than $1 per gallon above the national average.
Much of the blame for soaring fuel prices have been laid at the White House’s doorstep. But scuttling the XL Keystone Pipeline and pausing fossil fuel exploration licenses does not necessarily impact the current price at the pump. The economics of supply and demand is primarily based on short-term thresholds. The current administration’s policies show a determination to pivot away from fossil fuels to cleaner, renewable energy over the long haul. According to experts at Gas Buddy, those changes could ripple across the petroleum industry, causing gas and diesel prices to rise in the next six months.
“Refineries have modernized in recent years, but the economics are not getting any better. With the administration’s clear move away from fossil fuels, you wonder if there will be much investment in the U.S. in refining capacity,” De Haan reportedly said. “I think most of the refining capacity that we see added will probably be in the Middle East or Asia in coming years, so this is a problem that in the spring could result in gas prices reaching that $4 mark.”
Until electric heavy-duty commercial vehicles roll off the assembly lines in adequate numbers, owner-operators may be subjected to unprecedented fuel costs. If the fuel economics experts at Gas Buddy are correct, 2022 would be the sixth year in U.S. history the average gallon of diesel exceeded $4. The others include 2008, 2011, 2012, 2013, 2014, with the record high coming in 2008 at $4.723, according to the U.S. Energy Information Administration.
sources: cnn.com, fortune.com
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