Diesel drops close to $5 mark again

Sept. 15, 2022

U.S. average for trucking’s main fuel drops 5.1 cents to $5.033, declining for a second straight week and sustaining the retreat from record highs since mid-June, which was interrupted only by a 20.6-cent spike two weeks ago.

Scott Achelpohl

The U.S. average for diesel fuel continued on its monthslong downward trajectory—interrupted only by a 20.6-cent spike two weeks ago—in new government data for the week of Sept. 12. The diesel average dropped 5.1 cents to $5.033, and trucking’s main fuel was again below the $5 mark in three regions of the country, according to the U.S. Energy Information Administration (EIA).

Motor club AAA also saw nationwide diesel and gasoline prices decline all week. AAA, in its own reporting, mirrored EIA’s nickel-plus decline in diesel compared to last week. AAA monitors diesel and gas daily, weekly, and state-by-state, while EIA tracks both weekly and by region.

AAAIt seems the week-of-Aug. 29 surge reported by EIA may have been an anomaly, though the nationwide diesel average, according to the agency, still is $1.661 a gallon more than it was a year ago—a significant drag on the trucking industry that has pushed smaller fleets and owner-operators to the brink or out of business entirely and forced larger ones to lean on fuel surcharges.

U.S. Energy Information AdministrationFuel surcharges help carriers balance the fluctuations in the cost of diesel. The practice of incorporating them into the prices fleets charge shippers became an accepted one in 2005 after diesel rose above $4 a gallon for the first time in U.S. history when Hurricane Katrina hit New Orleans and crippled the critical energy-refining Gulf Coast region, where almost half of U.S. petroleum is refined. Refining capacity since has gradually gone down there through a variety of factors—a phenomenon partly to blame for this year's record diesel prices, which surged as high as $5.81 per gallon the week of June 20 before they started falling.

The price pressure has eased recently since oil prices, both for Brent crude and West Texas Intermediate, have dropped closer to $85 per barrel than the $110 to $115 per barrel a few months ago, and the market has more distance from the March price shocks in the aftermath of Russia’s invasion of Ukraine, which still puts the energy landscape at risk. After the invasion, energy experts were predicting $200-per-barrel oil, but crude prices are lower now than when the war in Ukraine began and have dropped 30% in the last two months.

Diesel dropping consistently and regionally

As for the here and now, three regions of the U.S. the week of Sept. 12 saw trucking’s main fuel fall below the $5 mark. In the aforementioned Gulf Coast, diesel is all the way down to $4.760 per gallon, a decline of 3.6 cents from last week. The fuel decreased to $4.949 after an 8.4-cent decline on the East Coast, while it’s down to $4.961 per gallon in the Rocky Mountain region, a 10-cent decline there. In the Midwest, diesel remains above the $5 mark at $5.085 but down 4.7 cents since last week. The fuel was even down again on the West Coast—the most expensive region in the country—to $5.658 per gallon, a decline of 3.5 cents.

EIA reported the U.S. average for gasoline the week of Sept. 12 also dropped about a nickel to $3.690 per gallon, providing more good news to consumers and the commercial fleets that utilize that fuel. AAA’s own daily U.S. average for gasoline was down on Sept. 12 to $3.716 per gallon, a 7-cent decline since last week and a 26.2-cent decrease compared to a month ago.