Diesel Prices Rise Again as Regional Costs Diverge

Diesel prices increased nationally for a second consecutive week, adding more pressure to commercial drivers and carriers already managing elevated operating costs.

The national average price for on-highway diesel reached $6.352 per gallon for the week of October 26, according to the U.S. Energy Information Administration. That was an increase of 7.6 cents from the previous week.

The national average has increased 17.3 cents in two weeks. It stood at $6.179 on October 12 before rising to $6.276 on October 19.

Diesel prices are now $2.634 higher than they were one year ago and $2.779 above the comparable price from two years ago.

Diesel Prices Rise 7.6 Cents Nationally

The latest increase continues a reversal from the temporary relief reported earlier in October.

At $6.352 per gallon, a truck purchasing 150 gallons would face a fuel bill of approximately $953 before discounts or fuel-tax adjustments. That is nearly $395 more than the same amount would have cost at the year-ago national average.

Actual costs vary based on location, fleet discounts, fuel-tax programs and purchasing practices. Still, the national average illustrates the size of the fuel burden facing owner-operators and small carriers.

Higher diesel prices do not affect every trucking operation equally. Some contract carriers receive fuel-surcharge payments based on a published index. Spot-market carriers may receive only an all-in rate, leaving them to recover higher fuel expenses through negotiations with brokers and shippers.

Lower Atlantic Records the Largest Increase

Diesel moved higher in five of the seven major reporting regions.

The latest regional averages were:

• East Coast: Up 9.5 cents to $6.079.
• New England: Down 4.9 cents to $6.421.
• Central Atlantic: Down 1.2 cents to $6.496.
• Lower Atlantic: Up 15 cents to $5.890.
• Midwest: Up 12.8 cents to $6.480.
• Gulf Coast: Up 4.8 cents to $5.951.
• Rocky Mountain: Up 9.9 cents to $6.521.
• West Coast: Down 6.5 cents to $7.329.
• West Coast without California: Down 4.5 cents to $6.614.
• California: Down 8.7 cents to $8.155.

The Lower Atlantic recorded the largest weekly increase, rising 15 cents. The region includes states along the southeastern Atlantic Coast.

The Midwest followed with a 12.8-cent increase. Its average reached $6.480, placing it above the national price despite traditionally being one of the country’s lower-cost regions.

The Rocky Mountain average increased 9.9 cents to $6.521. That made it the second-most expensive major region after the West Coast.

California Remains Above $8

California diesel declined for the week, but the state remained the most expensive area in EIA’s report.

The California average fell 8.7 cents to $8.155 per gallon. It was still $3.221 higher than one year earlier.

At that average, purchasing 150 gallons would cost more than $1,223 before discounts or tax adjustments.

The broader West Coast average declined 6.5 cents to $7.329. Excluding California, the regional average was $6.614 after a 4.5-cent weekly decrease.

These declines provided limited relief because prices in all three West Coast categories remained above the national average.

Gulf Coast Remains the Least Expensive Region

The Gulf Coast continued to report the lowest regional diesel average at $5.951 per gallon.

However, that price was still up 4.8 cents from the previous week and $2.601 above the year-ago level.

The Lower Atlantic was the only other region with an average below $6. Its price reached $5.890 despite posting the largest weekly increase.

These regional differences can influence fuel planning for long-haul carriers. Fuel taxes under the International Fuel Tax Agreement are based partly on where fuel is consumed, so purchasing all fuel in the least expensive state does not eliminate the full tax obligation. However, price differences may still affect when and where a carrier chooses to purchase fuel.

Higher Fuel Costs Meet a Sluggish Spot Market

The increase comes as the latest Truckstop and FTR report showed softer spot-market conditions.

Total spot load activity declined 2.3% during the week ending October 23. Total broker-posted rates also fell 2.3 cents per mile.

Dry van rates increased slightly, but refrigerated and flatbed rates moved lower. The Market Demand Index, which compares posted loads with available trucks, fell to its lowest level since January.

The combination of higher diesel prices and weaker load competition can create additional pressure for owner-operators. A posted rate may appear stronger than last year while a larger portion of the payment is needed to cover fuel.

FTR’s fuel-adjusted calculation showed a wider weekly rate decline than the all-in spot rate. Although spot-market carriers do not always receive a separate fuel surcharge, the calculation estimates how much of the rate may be needed for fuel-cost recovery.

Gasoline Moves Lower as Diesel Climbs

Regular gasoline moved in the opposite direction from diesel.

The national gasoline average declined 1.5 cents to $4.269 per gallon. Gasoline fell in most regions, although the Midwest average increased 12.4 cents.

The difference highlights how diesel and gasoline can move differently even during the same reporting period. Refining conditions, inventories, regional supply and demand can affect the two fuels separately.

For the trucking industry, diesel remains the more important operating-cost measure.

What the Latest Diesel Prices Mean

The latest report does not show uniform increases across the country. Prices declined in New England, the Central Atlantic and the West Coast while rising elsewhere.

However, the national direction remains unfavorable. Diesel has increased for two consecutive weeks and remains far above both its one-year and two-year comparisons.