If the price of diesel has shocked you lately, you’re not alone. Prices have been consistently rising all summer. On September 8th, the average U.S. diesel price was $4.463/gallon. The price was much higher in California, closing in at $ 5.801/gallon on September 4th. While the cost of diesel is still down compared to the highs it reached in 2022, it’s been creeping upward consistently for weeks, driven by inflation and low diesel inventories, and those issues aren’t going away soon.

According to experts, it’s likely that diesel prices will continue to climb as inventories have reached their lowest point since 2000. Refineries will not be able to help boost diesel production either, as most US refineries are running at maximum capacity and prioritizing gasoline production. Gasoline inventories are also at their lowest since 2015, and output is below average for the past decade. This means that diesel inventories will continue to dwindle, possibly leading to shortages and increased price hikes as the situation worsens.

Why are diesel prices so important?
Since most people drive vehicles powered by gasoline, the price of diesel isn’t usually a big concern to the average consumer. But diesel is a vital indicator of economic health because diesel is the chosen fuel of economic activity. How? Let us explain.

Diesel fuel powers heavy-duty trucks, machinery, and trains and is the chosen fuel for agriculture, construction, and manufacturing industries. Without diesel, crops aren’t planted and goods aren’t manufactured or transported thousands of miles into the hands of consumers. Regarding the rise of diesel prices in the economy, economist Philip K. Verleger Jr. said, “People should be very concerned. This will ripple through the economy.”

One industry that is particularly susceptible to volatile diesel prices is the trucking industry. Heavy-duty trucks and trains are the most significant diesel fuel users and are responsible for moving most of the consumer goods in the country. Here’s an example from the Los Angeles Times of how rising fuel prices affect a trucking operation. A Montebello trucking company reported spending an average of $1,340 per truck for fuel this year, up from $770 a year ago. That’s an increase of $570 per truck, and with 50 trucks in the fleet, that comes to an extra $28,500 a year in fuel costs. Those numbers rise even higher for California-based routes where the price of diesel fuel is the highest in the nation.

But the increased cost of diesel fuel doesn’t just affect the businesses that use diesel. That cost is transported down to the average consumer. For example, Walmart has a fleet of 7,400 diesel trucks. Their diesel fuel costs rose more than $160 million higher than the company predicted in 2022, according to Chief Executive, Doug McMillon. He says, “We generally passed on cost increases from suppliers to the category cost of goods levels.” This means that if fuel prices rise, the price of the goods transported also goes up. It’s one of the reasons grocery prices have grown so much in the last few years!

There’s not a whole lot that businesses can do to lower the cost of diesel. Most can expect to pay more for fuel this year and in the coming years. But there are some strategies you can try to help reduce your fuel bill. Here are some we recommend.

Buy bulk fuel
As a fuel and lubricant supplier, we offer wholesale bulk diesel fuel purchases for our customers. Bulk diesel fuel is priced much lower than retail diesel. We supply red and clear diesel to our customers and offer commercial fuel delivery service. You can store your fuel in tanks at your business for more convenient refueling. This service has several benefits for businesses, including:

  • Decreased downtime. Instead of traveling to fueling stations, your employees can fill up trucks and machinery onsite. This will lead to less downtime and increased efficiency for your business.
  • Increased savings: Wholesale diesel fuel is cheaper, but you can also be strategic about when you purchase your fuel. For example, if you follow diesel pricing trends, you can arrange to purchase more diesel fuel when prices are lower. Or you can buy fuel when your business has more cash flow so you’re prepared for when your budget is a little tighter.
  • Better fuel monitoring: Another advantage of buying in bulk and storing your fuel onsite is that you can better monitor your fuel consumption. Tracking how quickly your business uses fuel with wholesale fuel invoices is easier than managing individual transaction records from different retail operators. Your fuel bill will be more accurate and predictable, which will help you plan for your expenses better.
  • Order as much as you need. We have two different delivery options for our customers. You can order a bobtail/tankwagon ranging from 500-4,000 gallons or a full truck and trailer transport. Our drivers are highly trained in fuel transportation and distribution. Our trucks undergo an inspection every 90 days, so you don’t have to worry about spills, delays, or delivery issues.
  • Remote tank monitoring: Another service we offer for our wholesale customers is remote tank monitoring using SMARTank technology. With this option, you can store fuel in tanks in different locations and wirelessly monitor inventory levels and usage rates. You can also set up low-level alarms to help make ordering more diesel fuel easier.

Sign up for fuel tank monitoring
If you can’t store fuel onsite, another option that can help reduce your costs is our fuel tank monitoring program. When you sign up for this program, you don’t need to have tanks to store fuel or arrange for large fuel deliveries. Instead, you will get access to our cardlock fuel sites that offer lower prices than retail. With over 57,000 locations nationwide, open 24/7, this option is excellent if your business requires fuel on the go. You can set daily transaction limits, monitor for improper usage, and consolidate your billing. It’s a great way to access cheaper diesel fuel nationwide.

We know the rising cost of diesel fuel is hitting hard for many of our customers. Our team is committed to helping support our customers with the fuel and lubricants they need. Our commercial fuel delivery program can help you take control of your diesel fuel costs and save money. So, if you want to learn more about how these tools can help your business, contact your Greg’s Petroleum representative today.