Sometimes it feels like diesel is expensive enough to bedazzle your truck and buy it a pearl necklace, and this is especially true at present. Diesel prices are on the rise. This can spell trouble for the transportation industry and those that depend on it, which includes nearly everyone in the United States). When diesel is more expensive, it means that overall transport costs increase. This can pose a challenge to smaller and individually owned companies as miles stack up and a few extra cents per gallon can end up costing a pretty penny.
The Cost of Transportation
Transportation of any kind either commercial or civilian is expensive, from travel via rail, air or wheels, it is almost all powered by fossil fuels in some way or another. In wheeled transportation, gasoline and diesel reign supreme. Diesel and gas come from the same source, crude oil, but they are very different in terms of properties. Gas is a thin fuel that has low density but is very combustible, making it perfect for moving smaller vehicles. Diesel on the other hand is thick, dense, and packs a powerful punch which is perfect for fueling trucks and other heavier machinery. It may seem like robbery that diesel is more expensive than gas, but diesel is far more energy dense and therefore holds a higher value.
Besides the regular costs of purchasing vehicles and maintaining them, diesel is the main cost for trucking companies. It is a necessary and recurring expense that really adds up, especially when driving frequency is increased. If trucks are moving, there is the constant expense that comes with fuel. When diesel is more abundant and less expensive, it makes transportation less pricey which helps drivers and their companies save money. However, the economy functions best with balance and moderately priced fuel and transportation usually saves the most money for all parties.
Diesel prices have been rising for sometime now. According to the EIA (U.S. Energy Information Administration), diesel prices in the US are up $1.28 per gallon from last year and are still rising. However, diesel prices are not expected to stay this high. Predictions from the EIA show that crude oil (the source of diesel) will likely become less expensive in 2022 due to the possible action by Washington to open the Strategic Petroleum Reserve to stabilize costs. The action the government will take remains to be seen, but likely as we roll into the new year, diesel prices will fall.
The fall in diesel prices will possibly be promoted by the colder months as winter is usually good for diesel,particularly colder winters. As the freezing temperatures reduce the likelihood of car travel, which is bad for gas, but good for diesel as it becomes more profitable than gasoline sales. If there is plenty of supply for the demand, diesel prices will remain affordable.
Diesel prices have been steadily rising, but there is an end in sight. Soon they will likely fall to a more affordable level. This is very exciting as it means that businesses will be able to breathe easier and reduce their expenses. As we enter the new year, pay attention to political actions and the weather to see how diesel prices play out. A great source for diesel news is the U.S. Energy Information Administration for the most up to date energy news!