Diesel Continues to Trend Downward

One of the strongest arguments in favor of the transition to cleaner energy such as electric or hydrogen-powered trucks is the economic viability of these alternative fuels: with everything from the war in Ukraine to OPEC negotiations determining the cost of diesel fuel, switching is an investment that slowly but eventually pays off.

The time horizon for how long that takes has become a little bit longer, however, as diesel prices have been recorded at their lowest since mid-July.

Details

On December 18th, the Energy Information Administration (EIA) posted its latest data regarding the costs of diesel fuel. Here is what it found:

• All ten regions it tracks, from the East Coast to the West Coast, declined in price.
• While California still holds the highest out of all ten regions, it had one of the largest declines of the ten regions, clocking in at almost fourteen fewer cents per gallon.
• The national average is now comfortably below four dollars per gallon; it would take something of an economic upset for it to skyrocket above that threshold immediately.

By the time you read this, however, the December 18th update from the EIA will be out of date. What does the news from December 26th have to say?

The average in the eight days between December 18th and the 26th has increased two cents per gallon. Areas that have generally cheaper fuel such as the Gulf Coast saw increases, while areas with more expensive fuel like California saw drops.

Despite a slight increase of two cents per gallon on average at $3.914, it is still down 62.3 cents per gallon from a year ago.

Conclusion

With the United States drilling more oil than any other country in history right now (as hard as that may be to believe), an increase in supply will continue to cause downward pressure on prices going into the new year. With the inflation that has occurred over the past handful of years, it is unlikely that we will ever see $3 per gallon diesel again, though we would love to be proven wrong!

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