-April 21,2023-
Across the nation and in California, fuel prices are down from last year.That includes the all important transportation fuel – diesel- the truckers choice to transport goods, farmer’s favorite to plow fields, and the long time power source used to pick up neighborhood refuse.
In the Golden State where everything costs more, it is particularly welcome that the cost of diesel has plummeted since last summer when big rig drivers had to pay as much $8/gallon to carry a load.
Last year the average price of diesel reached a high of $6.88 a gallon in June raising the price of all goods that moved by truck and causing a considerable consumer backlash and contributing to the skyrocketing rate of inflation that still haunts us.
Today the US Energy Information Agency says the average price for diesel fuel in California is down to $4.96 – dropping over 50 cents a gallon over the past month.That is almost $2 a gallon decline from the high last year.
Local prices
Locally, diesel is selling below that average up and down the Valley including Fastrip in Farmersville for $4.89, Walmart in Fresno for $4.59 and Yokut Gas in Lemoore at $4.49 a gallon as of April 20.
Nearly all heavy duty-trucks, delivery vehicles, buses, trains, ships, boats and barges, farm, construction and heavy duty military vehicles and equipment have diesel engines. Diesel is the fuel of choice because it has 12% more energy per gallon than gasoline and has fuel properties that prolong engine life making it ideal for heavy duty vehicle applications, says the Energy Commission.
Gas industry website GasBuddy has commented about the downward trend
Lower energy consumption, due partly to a mild winter, has contributed to the price decline. Last spring’s record-high diesel price was $5.82 per gallon in the US- and worse in California.
The price of diesel this summer could be $2 lower than the prior year, said Patrick De Haan, GasBuddy’s head of petroleum analysis. “Coming out of winter, we’ll continue to see diesel prices decline.
Higher interest rates have led to price declines related to lower consumption. “Diesel’s decline has been astounding. We’ve seen improvements in fundamentals over the last few months with diesel prices down nearly $1 per gallon in the last 100 days, thanks in part due to the Fed raising interest rates, throttling back the economy, as well as Mother Nature reducing consumption through a mild winter and curbing consumption of diesel’s cousin, heating oil,” De Haan adds.
Like diesel – California’s gasoline prices have been falling averaging $4.82 a gallon in the past few days according to AAA, but $5.91 a year ago. They peaked at $6.44 last June.
The latest financial commentary for April 20 says gasoline futures fell to $2.6 per gallon, the lowest in nearly five weeks, due to an unexpected inventory build and a weakened demand. According to new data from the Energy Information Administration (EIA), gas demand decreased from 8.936 million to 8.519 million b/d last week. Meanwhile, total domestic gasoline stocks rose by 1.3 million bbl, with markets expecting a 1.267 million draw. At the same time, WTI crude prices have been retreating from a 5-month high hit in April on fears that a globally slowing growth could dampen fuel demand. OPEC+ announced a surprising reduction of output by 1.6 million barrels per day starting next month for the remainder of 2023.