News

Diesel falls below $5 a gallon for first time since October

Dec. 6, 2022

With 17.4-cent decline to $4.967 per gallon, trucking’s main fuel has fallen for the fourth week in a row, this time on weaker demand and oil prices that are staying around $80 per barrel. Supplies of the fuel also seem to be recovering.

Scott Achelpohl

The U.S. average for diesel fuel was full of all sorts of milestones for the week of Dec. 5, all good ones where the trucking industry is concerned.

Trucking’s main fuel fell for the fourth week in a row—and by the most, 17.4 cents, in that span of time and the largest slide since a 16.4-cent decrease in late July.

And it dropped below $5 per gallon (to $4.967) for the first time in several weeks, since the week of Oct. 3, according to the U.S. Energy Information Administration (EIA). Diesel is down almost 27 cents in the last two weeks, according to EIA. Motor club AAA measured the decline in the national average for diesel at 13.8 cents to just above $5 per gallon ($5.077) for the week of Dec. 5.

When prices show sustained increases or decreases, there usually is a driver of such a trend. But the latest run of decreases in diesel might reflect something that is not happening.

A few weeks ago, several analysts predicted substantial distillate (diesel, jet fuel, home heating oil) price increases. Diesel supplies were at their lowest for the fall to winter period since at least 2008, and earlier in October, supplies were their lowest since 1951.

A month ago, EIA’s own experts expected higher diesel prices because of low inventories and predicted they would stay above $5 for the rest of 2022. But diesel stockpiles are showing signs of strengthening. And operating capacity is up above 95% at U.S. refineries compared to early to mid-October, when these facilities entered their usual maintenance cycles and some were offline, causing a dip in supplies.

Demand for diesel is falling and oil prices are hovering around $80 per barrel (compared to around $120 earlier this year), so the sky doesn’t seem to be falling and diesel prices are headed in a better direction for now for the trucking industry.

The news is better, but prices are still sky high

However, prices remain historically high. The diesel average is $1.293 more per gallon than it was last year at this time, though prices were down in some regions by more than the U.S. average and declined again this week in every region of the U.S., according to the new EIA data.

In the Midwest, for example, trucking’s main fuel was down 20.1 cents to $4.907 per gallon. The average along the Gulf Coast dropped 17.5 cents to $4.524—the farthest below $5 anywhere in the U.S. Diesel declined 14.5 cents to $5.191 on the East Coast, but fell almost 23 cents in New England, a subregion of the East heavily trafficked and critical to trucking operations. In two other regions, the fuel dropped by 16.4 cents on the pricey West Coast to $5.502 per gallon and by 14.2 cents to $5.250 in the Rocky Mountain region.

The U.S. average for gasoline also was down substantially for the week of Dec. 5, sliding 14.4 cents to $3.390—or $1.577 per gallon cheaper than diesel, according to EIA. Gas, which is used widely by consumers and some commercial fleets, is down almost 26 cents in the last two weeks. AAA almost matches EIA and has gasoline down 14.3 cents from last week.

About the Author

Scott Achelpohl | Managing Editor

I'm back to the trucking and transportation track of my career after some time away freelancing and working to cover the branches of the U.S. military, specifically the U.S. Navy, U.S. Marine Corps, and the U.S. Coast Guard. I'm a graduate of the University of Kansas and the William Allen White School of Journalism there with several years of experience inside and outside business-to-business journalism. I'm a wordsmith by nature, and I edit FleetOwner magazine and our website as well as report and write all kinds of news that affects trucking and transportation.