Diesel prices have risen to their highest since the end of 2014, and crude oil prices (which drive the largest part of fuel prices) don’t show signs of improving anytime soon.
For the week ending Oct. 11, diesel prices saw the third-largest increase in more than a decade, according to Avery Vise, trucking analyst for FTR. According to the Department of Energy, the national average of $3.586 was up nearly 11 cents from the previous week and 18 cents from two weeks earlier. It was $1.20 higher than a year ago. That’s the highest since the end of 2014, Vise said during an Oct. 14 State of Freight webinar.
The highest prices were seen on the West Coast, at $4.425 in California and $3.784 in the rest of the West Coast region. The Central Atlantic region was close behind at $3.705. The least-expensive region for diesel was the Gulf Coast region at $3.335.
Double-digit increases have happened only twice before in the past decade: in September 2017 in the wake of Hurricane Harvey, when they rose more than 15 cents per gallon, and in August 2012 when they rose 11.5 cents.
Vise said if diesel prices continue to rise, it could reverse the recent trend of drivers and owner-operators leaving large carriers to start their own motor carriers as the cost of fuel eats into their profits.
Gasoline prices are high, as well, with a national average of $3.267 up 7.7 cents from last week and $1.10 higher than a year ago.
The Culprit? Crude Oil
Crude oil futures prices in the U.S. closed above $80 this week for the first time since late in 2014, noted the Wall Street Journal. Oil prices are up 125% from the end of last October.
In its latest Short-Term Energy Forecast, the EIA noted that oil prices have increased over the past year as result of sustained draws on global oil inventories. Prices increased after the Oct. 4 announcement by the Organization of Petroleum Exporting Countries that the group would keep current production targets unchanged.
The WSJ adds that Energy Secretary Jennifer Granholm said recently that the U.S. is considering releasing oil from the Strategic Petroleum Reserve. President Biden has twice urged OPEC to increase oil production more quickly, but so far the oil cartel has brushed off his requests.
According to Politico.com, the White House has been consulting with the oil industry on how to address rising fuel prices. Politico points out that this is “an awkward shift for the Biden administration, which has pledged to move the country away from fossil fuels and has drawn criticism from the industry and Republicans for pausing lease sales of federal land for oil and gas development.”