Since the last quarter of 2014 it has become impossible not to notice the decline in gasoline prices in the United States. In the last quarter, oil prices have fallen from roughly $90/bbl (a barrel) to $50/bbl, with expectations for the fall to continue.
Domestically, this has been reflected in the falling price of gasoline, which is currently at $2.033/gallon; however, there is still one hold-out to these falling oil and fuel prices that has yet to see the a major dip in price: diesel fuel.
Well, the great oil price crash of 2014/15 seems to have finally caught up with diesel prices, and for the first time in over five years, the price of diesel nationally fell below $3/gallon:
The retail average was $2.933, the Department of Energy said Jan. 20 after its weekly survey of fueling stations. The average is 94 cents a gallon lower than a year ago.
The diesel average was precisely $3 a gallon Oct. 4, 2010, at which point fuel was on the rise after the depth of the recession. The low point for diesel during the Great Recession was $2.017 on March 16, 2009.
Traditionally, diesel prices have remained higher than gasoline because of a difference in the taxation of the two fuels. Essentially, as most semi trucks are diesel, the US government has taxed diesel higher in an effort to subsidize and maintain highways:
“The diesel tax is a fair way to account for the impact trucks have on the road,” Darrin Roth, director of highway operations at the American Trucking Associations, said in an interview. “We think it should be even higher than it is.”
“It’s clear,” he said, “that there isn’t enough money going into highways” for necessary repairs and expansions, both of which help truckers.”
With the oil price crash it’s impossible to know what the future of oil, gasoline, and diesel prices. As much of our interstate highway system is maintained through fuel taxes and with the decline in prices, there is a strong case the taxes might increase:
Stephen Comstock, tax policy manager at the American Petroleum Institute, said he is “starting to see strong interest” in the idea of bumping up taxes. Former Secretary of Transportation Ray LaHood called on Congress to raise the gas tax earlier this month.
America’s transportation infrastructure used to the best in the world, but is now “way down the list,” he said at an event hosted by Mobility Lab.
“You’ve got to have a big pot of money. We don’t have it now.”
If those taxes do go up, there’s no reason to believe they would suddenly be equaled.
For now it is a waiting a game to see what the future will hold, but hopefully, with the decrease in diesel prices nationwide, perhaps diesel truck owners will finally feel the savings at the pumps gassers have been lauding since before Christmas.
Here’s hoping to a brighter, cheaper tomorrow!