The average nationwide on-highway price of a gallon of diesel fuel has fallen to its lowest level in 10 years, hitting $2.008 a gallon at the close of business yesterday, the Department of Energy's Energy Information Administration (EIA) said last evening.
The last time that weekly diesel prices, before being adjusted for inflation, were this low was on Feb. 14, 2005, when the national average was quoted at $1.986 a gallon. Adjusted for inflation, however, prices haven't been this low for about 14 years.
According to EIA data, average prices in the Gulf Coast, Midwest, Lower Atlantic, and Rocky Mountain regions came in well below $2.00 a gallon. Prices in the Gulf Coast region, typically the lowest because of the close proximity to the nation's refinery infrastructure, came in at $1.89 a gallon, EIA said. As usual, prices were highest in California, at $2.36 a gallon. The state has high taxes and strict environmental regulations that result in elevated pump prices.
Today's prices are nearly 83 cents a gallon below the same period in 2015, when prices had already fallen significantly. Less than two years ago, the nationwide price stood at $4.02 a gallon.
Fuel surcharges paid by shippers have also dropped dramatically in the past two years. Surcharges are calculated at a penny per each five or six cents a gallon that the market price exceeds a benchmark, or "peg," negotiated by a shipper and carrier. The surcharge is then paid based on miles travelled. For example, at a market price of $2 a gallon, a surcharge based on a peg of $1.20 a gallon and set at six-cent intervals would be a bit more than 13 cents a mile. A 1,000-mile trip would thus result in a $130 surcharge. At a market price of $4 a gallon, the same calculation would trigger an estimated $460 surcharge.
The EIA surveys 400 truck stops and service stations each week. By contrast, a company like ProMiles Software Development Corp., a Bridge City, Texas-based firm that provides real-time fuel-price tracking for carriers, can update data as frequently as every 30 minutes across a 5,000-truck-stop and service-station network. Chris Lee, the company's vice president of marketing, said average truck diesel prices in its database are usually 2 to 6 cents a gallon less than the average EIA prices. That's because ProMiles' surveys exclude truck stops that also pump automotive diesel, since those prices tend to skew the overall price trend higher.