Fleetowner 1301 Gaspump

Diesel prices expected to climb for now

March 29, 2005
Diesel prices expected to climb for now

The national average price for a gallon of diesel increased 0.5 cents last week to set a new record high of $2.249, the Energy Information Administration said. This marks a 26.6-cent increase over the course of the eighth consecutive week of price hikes.

Prices in all regions went up, but in the Central Atlantic and the oil-rich Gulf Coast regions costs held the steadiest, as they posted only a 0.2-cent gain to $2.36 and $2.182, respectively. The Gulf Coast also holds the crown for the least expensive region in which to fill up. California holds two dubious honors for the largest price hike and most expensive region for diesel, after a 3-cent jump to $2.512.

Cold weather coupled with refinery maintenance throughout February and March kept diesel prices high, according to Jacob Bournazian, EIA economist. Since heating oil is derived from distillates, the same petroleum product that is processed into diesel fuel, lingering winter weather tightened diesel supply.

Crude oil prices, which accounts for about half of the total retail price of diesel, remain in the mid-$50s level.

“A strong pace in worldwide demand [for petroleum] has created that kind of marketplace where crude oil has been gradually escalating in cost over the last 24 months,” Bournazian told Fleet Owner. “OPEC has made public statements that they want to use $50 as a benchmark for their oil. We don’t expect it to fall in the high $40s as a result of their position.”

Over the next few weeks, a drop off in heating oil demand will keep diesel prices relatively stable. However, don’t expect any relief in diesel prices.

“You may see diesel creep up another two to three cents another three weeks before there’s a fallback on [distillate] demand in April,” Bournazian said. “The low-sulfur [distillates] will be strictly used for transportation fuel and that will give the industry some breathing room to rebuild inventory over the summer.”

About the Author

Terrence Nguyen

Voice your opinion!

To join the conversation, and become an exclusive member of FleetOwner, create an account today!

Sponsored Recommendations

Report: The 2024 State of Heavy-Duty Repair

From capitalizing on the latest revenue trends to implementing strategic financial planning—this report serves as a roadmap for navigating the challenges and opportunities of ...

Fleet Industry Benchmarks: How does your fleet stack up?

Discover how your fleet compares to industry benchmarks and gain insights from a 2024 Benchmarking Report on maintenance spend, turnaround time, and more. Join us to identify ...

Build a Tolling Program to Manage Toll Fees and Risks

Fleets looking to effectively manage their operational costs should consider their tolling costs. Download the PrePass whitepaper, “Build a Tolling Program to Manage Toll Fees...

Reducing CSA Violations & Increasing Safety With Advanced Trailer Telematics

Keep the roads safer with advanced trailer telematics. In this whitepaper, see how you can gain insights that lead to increased safety and reduced roadside incidents—keeping drivers...