Truck drivers stop at a gas station in Emerson, Ga., north of metro Atlanta, on Feb. 11, 2014, to fill up their tractor trailer rigs. (David Tulis/AP Photo)
A major fuel supply company has issued an alert about diesel fuel shortages in several Southeastern U.S. states.
States that are expected to experience shortages include Alabama, Georgia, Tennessee, North Carolina, Virginia, and South Carolina, Mansfield Energy said in an alert last week. The company also noted “extremely high prices in the Northeast.”
“Poor pipeline shipping economics and historically low diesel inventories are combining to cause shortages in various markets throughout the Southeast,” the company said. “These have been occurring sporadically, with areas like Tennessee seeing particularly acute challenges.”
It noted that fuel prices are 30 to 80 cents higher than the posted market average due to “tight” supply, while saying that “fuel suppliers have to pull from higher cost options, at a time when low-high spreads are much wider than normal.”
Fuel carriers are now having to go to “multiple terminals to find supply, which delays deliveries and strains local trucking capacity,” it said.
Due to “rapidly devolving” conditions, the firm issued its “Alert Level 4” to address the volatility, according to the statement. For the southeastern United States, Mansfield said it is issuing a “Code Red” alert and is “requesting 72-hour notice for deliveries when possible to ensure fuel and freight can be secured at economical levels.”
Diesel enables most of the shipping across the United States and is used by long-haul trucks and freight trains. While gasoline prices have dropped since they posted record highs in June, diesel hasn’t decreased nearly as much and currently stands at $5.31 per gallon, according to AAA.
Bottlenecks in supply chains caused by COVID-19 lockdowns and soaring energy prices have added to rising price levels. Data released earlier this month show the Consumer Price Index, a key inflation metric, has risen 8.2 percent year-over-year in September.
Republicans, meanwhile, have targeted the Biden administration for its policies around oil drilling, pipeline construction, and unremitting focus on promoting electric vehicles. In response to the energy crunch, the White House has released tens of millions of barrels of oil from the U.S. Strategic Petroleum Reserve, bringing it down to about 400 million barrels, or the lowest levels in decades.
Democrats and President Joe Biden, meanwhile, have blamed Russia’s war in Ukraine for the spike in prices and low supply.
There have also been concerns that the United States is running out of diesel. Oct. 21 data from the Energy Information show that the country had 25.9 days of diesel left.
“Russia produces a lot of heavy products, a lot of heavy oil that produce and yield more diesel,” GasBuddy’s Patrick de Haan told KGVO. “The other problem is simply demand post-COVID that has certainly recovered significantly with many trucks and many goods. We can all remember how ports have been stuffed full with goods that Americans have been buying and those all need to move out of port via trucks.” Source
This is a serious issue. We should be watching this closely.