Diesel prices fall below $4 per gallon mark

The price per gallon for diesel fell 4.8 cents to $3.956 per gallon, falling 0.5 cents short of last week’s 5.3 cent drop, which was the steepest decline in almost five months.

By ·

Diesel prices declined for the sixth consecutive week, according to the Department of Energy’s Energy Information Administration (EIA).

The price per gallon for diesel fell 4.8 cents to $3.956 per gallon, falling 0.5 cents short of last week’s 5.3 cent drop, which was the steepest decline in almost five months. The steepest decline in the last six months was a 6.6 cent decrease to $3.828 per gallon during the week of December 19.

Over the last six weeks of diesel declines, prices have dipped a cumulative 19.2 cents during that span. And prior to this most recent decline, the price per gallon had been above the $4 per gallon mark for 12 straight weeks.

On an annual basis, diesel is 4.1 cents less than it was a year ago.

In its recently updated short-term energy outlook, the EIA is calling for diesel prices to average $4.06 per gallon in 2012 and $4.03 in 2013, with oil pegged at $104.12 per barrel in 2012 and $103.75 in 2013.

Oil prices are currently at $92.13 per barrel on the New York Mercantile Exchange. This is down sharply from prices in the $106 range earlier this month. An Associated Press report said the decline is due to concerns about global economic growth and news that that Iran will allow the U.N. nuclear agency to restart a probe into its nuclear program.

Despite the fluctuation of oil prices, LM Oil and Fuel Columnist and Senior Analyst at Mercator International, LLC Derik Andreoli recently wrote that gasoline prices remained insulated from the rising cost of crude for a couple reasons.

“On the supply side, ethanol production increased rapidly over this period of time. Today, roughly one in ten gallons of gasoline consumed in the U.S. is derived from corn-based ethanol, which is a substitute for gasoline but not diesel,” wrote Andreoli. “Moreover, European gasoline demand has been supplanted by diesel, and old, inflexible European refineries were set up to maximize gasoline output. As a consequence, Europe’s surplus gasoline was, and is, exported to the U.S. East Coast. As gasoline supply climbed relative to diesel, U.S. gasoline consumption fell as a consequence of the recession. Only now is it rebounding as the economy limps along the path of recovery. With fuel economy increasing, however, demand is not likely to recover to pre-recession levels.”

Even with recent declines, shippers continue to keep a watchful eye on fuel prices and are taking steps to reduce mileage and cut down on empty miles. Steps like this were cited by many shippers at the NASSTRAC Logistics Conference & Expo earlier this month.

And as previously reported by LM, shippers continue to take steps to minimize the impact of fluctuating fuel costs. Over the years, they have maintained that this is imperative as higher diesel prices have the potential to hinder growth and increase operating costs, which will, in turn, force them to raise rates and offset the increased prices to consumers.


About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

Diesel · Diesel Prices · EIA · All Topics
Latest Whitepaper
The View from the New “Single Window”
The single window, officially known as the "International Trade Data System," operates via the Customs and Border Protection (CBP) agency's Automated Commercial Environment (ACE) platform, and serves as a single point of contact for all trade filings.
Download Today!
From the March 2017 Issue
WMS vendors are stepping up to the plate and developing functionalities and solutions that meet the complex needs of today’s companies. Our top analysts take a peek into these developments and discuss the DC of the future and the software that will support it.
5 Supply Chain Trends Happening Now
2017 Warehouse/DC Equipment Survey: Investment up as service pressures rise
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
2017 Trucking Regulations & Infrastructure Update
In this session our panel brings shippers up to date on the state of transportation regulations. Discussion will revolve around regulatory reform, aspects of the federal highway bill and what the transportation landscape looks like in the early days of the Trump administration.
Register Today!
EDITORS' PICKS
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...
ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...

2017 Rate Outlook: Will the pieces fall into place?
Trade and transport analysts see a turnaround in last year’s negative market outlook, but as...
Logistics Management’s Top Logistics News Stories 2016
From mergers and acquisitions to regulation changes, Logistics Management has compiled the most...