Diesel Shortage Spreads Across East Coast

Jack Phillips
By Jack Phillips
October 26, 2022Businessshare
Diesel Shortage Spreads Across East Coast
Semi trucks pull into TA Travel Center to gas up in Jessup, Md., on May 2, 2022. (Jim Watson/AFP via Getty Images)

A diesel fuel shortage is spreading across the eastern United States as one company has launched an emergency delivery rule.

Mansfield Energy is now requiring a 72-hour notice for deliveries to obtain freight and fuel “because conditions are rapidly devolving,” the firm told customers, according to Bloomberg News. Fuel prices are running 30 to 80 cents higher than the market average, the firm said.

“At times, carriers are having to visit multiple terminals to find supply, which delays deliveries and strains local trucking capacity,” the note said, referring to the market in Tennessee, which is “seeing particularly acute challenges.” The Epoch Times has contacted the firm for comment.

Recent provided by the U.S. Energy Information Administration (EIA) show that diesel stockpiles are at their lowest level for October in records that date back to 2008. The United States had about 25 days of supply as of Oct. 14, which is down from 34.2 days of supply from a month before.

The low supply drew critical comments from a top White House official in a recent interview with Bloomberg. National Economic Council head Brian Deese said the supply is “unacceptably” low and said “all options are on the table” to deal with it.

More Warnings

With diesel supplies dwindling, Goldman Sachs warned Tuesday that a shortage of diesel fuel will likely push prices even higher. The investment bank said in a note that underinvestment in refining capacity coupled with refinery closures and operation disruptions have contributed to the diesel scarcity.

Because long-haul trucks and freight trains run on diesel, a shortage and increase in prices will translate to higher prices on goods and food nationwide.

“The public are apoplectic when gas rises, but diesel has incredible impacts to inflation in the form of freight costs and surcharges,” Tom Kloza, Opis global head of energy analysis, told USA Today on Wednesday.

The federal government’s efforts to curb higher energy prices will likely fail because it focuses on crude oil and has little impact on refined fuels, according to analysts with Goldman.

“Refining constraints can create a sharp wedge between where crude and product markets clear, making policy management of crude supply less effective at controlling consumer prices,” analysts Callum Bruce and Roman Langlois wrote in the note.

Diesel, meanwhile, is similar to heating oil that is used for furnaces across the United States. When the winter months approach, demand for heating oil will rise, which will likely place more constraints on diesel.

“Between now and the end of November, if we don’t build inventories, the wolf will be at the door,” Kloza said. “And it will look like a big ugly wolf if it’s a cold winter.”

According to data provided by AAA, diesel reached a record high of $5.81 per gallon in June. But Kloza noted that prices could surge even beyond that figure.

“There’s a real threat something in the energy chain will go parabolic, and I think generally, the worry is that something that goes parabolic is diesel and heating oil,” he said.

From The Epoch Times

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