We’re Just Here For the Gasoline: A Look at Rising Diesel Prices

Greetings, friends in the diesel realm! We hope skyrocketing fuel prices aren’t ruining your day.

(We’ll wait for the exasperated laughter to subside.)

Various news outlets have covered the pinch everyone is facing at the pump. We’ve probably all seen at least one clip of someone who suddenly has to choose between driving out to see their families and putting food on the table. In other words, it’s getting bad.

But that’s the impact on folks driving regular cars that take regular fuel. In the U.S., diesel is even more expensive than your average regular unleaded, so the pain citizens are feeling at the pump is felt even more acutely by drivers, fleets, and others in the heavy-duty world.

At the moment, business continues as usual—maybe with some added venting over receipts. Truck drivers continue to climb into their cabs and head for the highways to keep the nation’s supply chain running.

As we publish this post, we’re pleased to report that prices have stabilized a bit, but we couldn’t help but wonder: What happens if prices start climbing again?

THE HIGHER COST OF DIESEL

A long time ago, in an economy far, far away, diesel used to be cheaper than regular gas.

In 2004, that all changed. In general, its higher price is due to taxes (over 24 cents per gallon in the United States—and that’s before some state taxes are tacked on!) and costs associated with refining it. There is also some economic pushing and pulling (also called supply and demand) at work. As an example, at the height of the COVID-19 pandemic, when a lot of us were hanging out at home instead of driving, fuel prices—including diesel—dropped.

(With that said, it’s important to note that truck drivers kept on rolling through the pandemic, making sure the nation’s supply chain remained functional. It was an incredible testament to their strength and willingness to—forgive us—just keep trucking.)

With that in mind, the gradual return to the roads has resulted in rising fuel prices. The United States recently banned Russian crude following that country’s invasion of Ukraine, which amounted to about 9-10% of our oil imports. You know how that goes: the oil that is already here, and the oil that is still coming in, instantly becomes more expensive.

And we grind our teeth all the more when reaching for our wallets.

HOW HIGH CAN THEY GO?

We’re used to seeing prices go up or down by a few cents; these kinds of fluctuations are just a fact of life. But skyrocketing prices that are not offset by, say, increases in wages or some sort of fuel allowance can strangle commerce.

How? Well, it starts slowly; various companies and manufacturers will start looking at ways to conserve fuel. They’ll stop offering perks like the next-day or two-day shipping as those options become too expensive to maintain. And let’s be honest—while ultra-fast shipping is nice, it’s also largely a luxury, and a relatively new one at that. We can (usually) survive without it.

But next-day transport is far from the only type of vehicle to use diesel. Right now, diesel prices are just under or just over $5/gallon in much of the country. Most big rigs carry between 125-300-gallon fuel tanks.

Readers, I am not good at math, but even I know that’s about $1500 to fill up. Now figure on that semi getting about six miles per gallon, so maybe 1800 miles between fill-ups. The existing prices are already really starting to hurt individual owner-operators; while fleets may have a little more wriggle room, the reality is they usually have thin margins, too. If prices continue to go up, you may see some just parking their trucks, unable to afford the fuel to run them.

IT’S NOT JUST TRUCKS

Big gaps in the supply chain quickly lead to more demand than supply. You know what happens then: an item that is in demand becomes more expensive, and then becomes more scarce, and then may not be available at all. Remember what happened with toilet paper?

Oh, Fullbay, you may be saying, let’s not go there.

Agreed. Let’s just say material goods are going to get a lot more expensive.

And while we’ve focused on the expense associated with transporting things, remember that high diesel prices don’t just impact truck drivers and shipping fleets. Guess who else uses diesel?

Farmers.

You know, the people who grow all the food you eat.

They are also largely operating on thin margins. If they can’t afford to run the equipment that puts food into supermarkets and restaurants (and eventually on your table), then, well, you can imagine what happens next. And let’s not forget emergency services vehicles, or school buses, or heck, trains and ships (cargo and fishing vessels).

We’ll stop there. Mad Max is a fun and sometimes thought-provoking movie. It is not, in fact, a reality most of us want to live in.

(We also want to add that we a) acknowledge this is a worst-case scenario, and b) steps would certainly be taken by everyone to avoid reaching that point.)

MAKING THE MOST OF YOUR MILEAGE

So, what can we do about the cost of diesel?

To be honest, not much. While we have many interesting superpowers, regulation of fuel prices is not among them.

What we can do is help everyone who operates diesel vehicles squeeze every last mile out of every gallon:

• Make absolutely certain fleet drivers are keeping up with DVIRs. Drivers often spot problems before anyone else, allowing a technician to make the fix early (before it gets worse and impacts performance).
• Invest in practical technologies that can improve your overall mileage. Micheal Roeth from FleetOwner goes into detail about some of these solutions.
• Schedule preventive maintenance to ensure any vehicle, whether it’s a semi or a harvester, is in peak operating condition—no worn-out or damaged parts dragging down performance. (Fullbay makes tracking PM work a snap—just sayin’.)

As we mentioned up top, things do seem to have stabilized. We hope this is the beginning of a true reprieve and not a calm before the storm—but we’ll keep following the situation and keeping you up to date with other ways to make the diesel you get go that extra mile.