Much more than history has ever recorded, the US is faced with a low inventory of diesel and gasoline. Amidst this diesel shortage crisis, Fox News Host, Tucker Carlson made a disturbing tweet. The tweet read “this country is about to run out of diesel fuel.” This is coming shortly after rumors about the US running out of fuel in 25 days started circulating. The national average price of diesel has risen 3.4 cents in the last week and stands at $5.32 per gallon.
Causes of the Diesel Shortage Crisis
The cause of the diesel shortage crisis in the US can be traced to several factors. However, it cannot be isolated from the Post Covid-19 effects.
Due to the pandemic, the demand for diesel and other fuels dropped drastically. As a result, several refineries were shut down. On the flip side, refineries that were not shut down got converted to biofuel refineries.
Immediately after the lockdown, activities began to resume. However, several trucking industry challenges came up as well. Additionally, Russia’s war on Ukraine made Europe stop purchasing from them. Hence, leading to more competition for diesel fuel in the Northeast.
Effects of the Diesel Shortage Crisis on The East Coast
The diesel shortage crisis is taking the East coast by storm. As a result, different fuel suppliers have been forced to initiate emergency protocols. In a note to its customers, Mansfield energy now requires a 72 hours’ notice for deliveries to secure fuel and freights.
Additionally, the note reads that fuel prices now run at 30-80 cents higher than the market average. However, this price variation only affects areas that are seriously hit by the diesel shortage crisis. Manfield stated that carriers often have to visit multiple terminals to find supplies. Consequently, this delays deliveries and causes a strain on local trucking capacity.
Although, supplies are being channeled toward the East coast, it is not as fast as the consumption rate. The Colonial pipe which is the main source of supply for Southeast markets is fully booked. Unfortunately, the first full cycle did not arrive till November 3. And it will take another full week for it to arrive in New York.
The Government’s Response
Amidst the diesel shortage crisis, the president of the United States, Joe Biden, has instructed all refiners to halt exports. He asked them to do this so that they could stabilize the dwindling inventories. Furthermore, he ordered the delivery of more gasoline and diesel to the Northeast of the United States.
The POTUS further mentioned that he would tax the windfall profits of oil companies if they fail to reinvest in production. In a bid to curb the diesel shortage crisis, White House Officials are deliberating on actions to discourage diesel export. Consequently, administrative limitations on the export of diesel and other fuels may be implemented.
The OPEC Secretary General Haitham Al Ghais made a remark that is supposedly in support of the move by the government. According to him, A lack of oil investments is planting the seeds of a future energy disaster.
How Consumers Are Affected by The Diesel Shortage Crisis
Consumers might not feel the effect of the diesel shortage crisis at the pump. However, the effects of the crisis will be evident during purchase of goods or services. The cost of auto transport will also be increased due to the diesel shortage crisis.
The reason is quite straightforward: logistics and delivery companies now pay more for diesel. Consequently, shoppers and shippers will have to bear part of the increase in cost.
De Haan put it this way “Consumers won’t feel it when filling up with gasoline, but as they shop for the holidays, the cost of goods will be higher,” He further added that this will result in some form of inflation.
Implications of the Diesel Shortage
Despite all these occurrences, a professor of energy at the University of Houston has given a comforting explanation. In his discussion with CBS MoneyWatch, Ed Hirs explained that despite the shortage crisis, the US won’t run out of diesel. According to him, inventories of diesel and gasoline are down below five-year averages. However, if the world were to stop, the US would have 25 days’ worth of diesel.
In a similar report, Patrick De Haan, an energy expert at Gas Buddy, calmed the nerves of citizens. He debunked the view that the US would run out of diesel in 25 days. According to him, that is a number that would only stand if all refineries in the country were shut down.
Metti International is Here to Help
Despite the challenges caused by the diesel shortage crisis, our commitment to our customers at Metti International is unwavering. We have weathered several storms in the auto transport industry and this will not be an exception.
During the supply chain disruptions, port congestion, and truck driver shortage, our clients enjoyed top-notch car shipping services. We have a track record of excellence. Hence, earning us the BBB Torch Award For Ethics four times.
Metti is the best car shipping company for your vehicle shipping in the US. Regardless of where you reside in the top 18 counties, we are at your service. Furthermore, to ensure the prompt and safe delivery of your vehicles, we only use carriers with 98% or higher service ratings.