Looming US Diesel Crisis
November 04, 2022

Looming US Diesel Crisis

This article will cover how the diesel crisis in the United States had started, the impact of the crisis, and what companies could do to help combat the issue.

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What’s Going on with the US’s Diesel Reserves?

Much like Americans are facing a crisis for gasoline, many people have issues paying for diesel. These problems could continue to rise as there are warnings of an impending diesel shortage that will impact the southeastern United States due to the low supply of diesel reserves. Mansfield Energy, one of the top companies for delivering fuel, noted that the diesel supply markets are rapidly devolving, even expecting several states with serious effects from the shortage. This was announced after the Energy Information Administration had reported the diesel reserves are at the lowest levels since 2008.

What’s Going on with the US’s Diesel Reserves? 

How?

Many consumers of diesel may be wondering how the diesel shortage has occurred. One company had speculated that the poor pipeline shipping economies along with a low supply of diesel reserves created the low supply. Just to paint a picture of the low reserve levels, typically the East Coast markets have 50 million barrels in storage, but now only have 25 million barrels available.

Impact

Of course the impending diesel shortage will make an impact on the lives of the trucking industry. In particular, it is expected that the most serious effects will be in Maryland, Virginia, Alabama, Georgia, Tennessee, North Carolina, and South Carolina. This will increase the cost of diesel drastically, leading to an even higher increase in the price of goods for consumers. It is recommended that companies start to plan now for the diesel shortage, rather than panicking at a later date when the shortage occurs. It is advised that bulk fuel buyers do not panic and order fuel when they do not know whether it will fit in the tanks or not.

Buying in bulk may not be an option for some companies due to the lack of storage. For companies who do not have a large tank on site, they should rely on fueling off locations, of course the company could run out of fuel as the fuel supplier may run out of fuel. Furthermore, companies can issue emergency fleet cards that allow access to fuel in a trackable way, or even consider installing a small tank for emergency fuel.

 

Fixing Supply Levels

Besides the obvious drilling for more diesel, there are a few things that could help bring the supply back to normal, or at least acceptable levels. First of all, a slowdown in freight movements and manufacturing activity could build the supply levels up. Furthermore, raising interest rates and tighter financial conditions in the US and other major economies to reduce fuel consumption, creating a more sustainable level.

Conclusion

There are a number of things in the economy in America that are in crisis mode. Diesel is soon to be one of the things that are in limited supply, the limited supply will lead to higher prices in diesel, which will lead to higher prices for goods that are transported through diesel (basically everything). There are a few things that will help dissipate the issues for trucking companies like buying in bulk in preparation for the shortage or providing a small tank for emergency vehicles for trucks on the road.

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