The latest information shows that 97% of commercial tractor-trailers use a diesel engine, so the price of diesel is critical, because the vehicles that run on it transport 70% of the nation’s freight tonnage. Therefore, the cost of diesel is also critical to the operations of a trucking company. It can determine what you haul, how often, and how far.
As of October 17, the national average diesel price reached $5.34 per gallon, according to U.S. Department of Energy/Energy Information Administration data. That is an increase of $1.67 per gallon from last year.
Coming on the heels of the pandemic, Russia’s invasion of Ukraine back in February
increased fuel costs due to sanctions placed on the country. While the United States is the largest producer of crude oil globally, the nation still relies on Russia for around 8% of our overall crude oil imports.
Diesel prices across the U.S.
Why are diesel prices so high if we’re the top producer of crude oil? It’s because we still use more oil than we’re capable of generating.In addition, 11 refineries in the U.S. have shut down since the pandemic.
California’s average diesel prices are the highest in the nation at $6.61 per gallon. The state
often sees higher prices than the national average. Hawaii follows California at $6.13 per gallon and is followed by Pennsylvania, Washington, and Oregon, where diesel is around $5.75 a gallon.
The cheapest state to fuel up in is Texas, where the average diesel cost per gallon is $4.82.
Georgia and Mississippi are next in line with prices at $4.85 and $4.88, respectively.
Costs in the rest of the world
Other economies are not only dealing with COVID-era adjustments but are seeing a much more significant effect due to the reduction of Russian imports. The European Union depends heavily on Russia for its oil and natural gas needs, getting nearly one-third of its crude oil from the nation.
After Russia invaded Ukraine, EU diesel prices shot up 69% above January numbers and have stayed high.
In Sweden, the current average cost of diesel is the highest, at $9.49 per U.S. gallon. According to reported data, Belgium averages $8.17 per gallon, while Germany is at $7.91.
The lowest diesel prices in an EU nation are $5.52 per gallon in Poland, followed by Bulgaria at $5.95. So the EU’s lowest fuel costs are on the high end compared to the U.S.
In East Asia, diesel prices average around $5.68 per gallon, with Hong Kong, as expected, highest at $10.32 (the country relies entirely on imports). Many nations in the region are feeling the recent cutbacks from China.
Some major oil-producing nations are found on the African continent, including Angola, Algeria Libya, and Egypt. Prices range from 78 cents to around $4.96 a gallon.
South America’s highest prices are around $7.03 in Uruguay, with the lowest at just 7 cents per gallon in Venezuela. Venezuela is a significant oil producer, outpacing Saudi Arabia, but the nation also has an extremely low per capita income.
Let’s try not to panic
It’s not good to be at the mercy of these soaring prices. Some trucking companies and independent owner-operators will be forced to avoid runs to certain states, to turn down loads, or inevitably to increase their own prices to customers in order to cover the fuel costs. These tough decisions place a lot of pressure on trucking companies.
Diesel’s price is connected to rising inflation. As fuel prices continue to increase, some of the larger trucking companies will be able to pass these surcharges on to customers, and these charges will be reflected on retail shelves. It’s a domino effect that can’t be stopped once set in motion. Everyone is simply waiting for the reset that will tip things in the other direction.
While the U.S. prices are historically high, others are worse off. These countries may not only be dealing with higher inflation but their own regional issues on top of the more significant global economic problems.
So the only thing to do is sit back, tighten your reins, and ride this thing out as best you can.
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