Diesel fuel prices over the last 10 weeks have returned to near pre-pandemic levels with prices reaching their highest mark since the week ending March 16, 2020, according to the Department of Energy's Energy Information Administration.
During the most recent week ending Jan. 11, the average price for a gallon of on-highway diesel now stands at $2.67, which is up 30 cents since the 2020 low of $2.372 during the week ending Nov. 2.
In DOE's monthly Short-Term Energy Outlook report released Jan. 12, the department says diesel prices in the U.S. averaged $2.55 per gallon in 2020, down about 50 cents a gallon from 2019's average. DOE says the 2020 declines reflected a drop in crude oil prices brought on by the COVID-19 pandemic.
In 2020's fourth quarter, however, DOE says the inventory level for diesel returned to within its previous five-year range, allowing retail prices to return to pre-pandemic levels.
DOE predicts diesel prices will continue to hover around $2.71 per gallon throughout 2021.
“EIA expects that global economic activity returning to pre-pandemic levels will help drive diesel refinery margins higher than their multiyear lows in 2020 during the forecast period,” DOE says.
Broken down by quarter, DOE projects retail diesel prices across the U.S. to average $2.73 per gallon in the first quarter of 2021, $2.69 per gallon in the second quarter, $2.69 in the third quarter, and $2.72 in the fourth quarter of the year.
Chris Lee, vice president of marketing for ProMiles, says his best guess is that fuel prices will increase into the summer – and potentially beyond.
“I don't have the science to back it up, but if I were to guess, we're headed back to at least a $3 average by summer, and I personally don't think it will stop there,” he says.