Now, almost three years later, the economy and the supply chain are still recovering from Covid-19 and the stalls in production from 2020. What is on the horizon for the year ahead when it comes to diesel fuel prices and diesel fuel production? The Diesel Technology Forum recently reported on its predictions along with insight from the Energy Information Administration.
The Diesel Technology Forum reports that diesel sales made up 1.3% of light-duty auto sales in 2022, a 0.1% increase from 2021. For Class 2 and 3 diesel-powered vehicles, the Diesel Technology Forum reports 3.5% of total sales in 2022 compared to 3.2% in 2021. In 2023, US consumers and fleet owners will have 32 total options for diesel-powered vehicles, including vans, trucks, and SUVs. This number includes General Motors’ new engine debuting this year, the Duramax 3-L I-6 LZ0.
Diesel drivers and owners today have more choices of what fuel to use in their vehicles. According to the Diesel Technology Forum, all diesel engine manufacturers have certified their engines for the use of B20 (biodiesel) fuels, and the US Department of Energy lists more than 800 retail stations where biodiesel fuel is available.
DIESEL FUEL PRICES
Diesel saw its highest price ever recorded in 2022. Factors contributing to that high price were petroleum supplies and their pricing, demand, and the war in Ukraine. The Diesel Technology Forum reports the current average national diesel price from $4.549 to $5.08 a gallon. This figure is up 89 cents from a year ago.
One bit of good news, Clean Fuels Alliance studies show that US production of renewable diesel and biodiesel fuels reduce distillate fuel prices by increasing diesel fuel supply.
It’s darkest before the dawn, as the saying goes, and the same could be said for the price of diesel fuel in 2023. A forecast from the Energy Information Administration’s (EIA) Short Term Energy Outlook estimates that oil inventories will fall at the beginning of the year, but rise by almost .7 million barrels per day in the second half of the year. This prediction also projects a barrel price of $92 by the end of 2023, which is $3 less than what was forecasted in December 2022.
BIODIESEL FUEL OUTLOOK
Not only will diesel fuel production increase, the EIA predicts biodiesel production will also increase. Biodiesel production averaged roughly 123,000 barrels per day in 2022, and EIA predicts biodiesel fuel production will increase by 5,000 barrels to 128,000 barrels per day in 2023. Biodiesel imports are also expected to increase from 1,000 barrels per day in 2021 to 3,000 barrels per day in 2022 and 2023.
EIA also predicts that by the end of 2022, more renewable diesel fuel would be produced than conventional biodiesel fuels. Biodiesel and renewable diesel fuels, although composed of the same feedstocks, are produced differently, with renewable diesel fuel as a result. This renewable diesel fuel features key properties that are essentially identical to conventional diesel fuel, which makes renewable diesel fuel a drop-in replacement for petroleum diesel fuel.
UNANSWERED QUESTIONS
The unprecedented times faced in 2020 have caused lingering effects on the economy and supply chain that have yet to balance, and the war in Ukraine contributed to fuel price increases on a global scale. No one can predict exactly what the future holds, but one thing fleet owners and operators can continue to do is play it safe, and hope for the best.
Read the Diesel Technology Forum’s full article at www.dieselforum.org.
