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Diesel prices, supply steady where Ian hit but soaring in California

Fuel marketers’ association says no problem getting diesel into southwest Florida

Photo: Jim Allen/FreightWaves

The physical landscape along the Florida Gulf Coast may have been permanently altered, but one thing that hasn’t changed is the ability to get diesel fuel if a truck heads into that region to provide regular freight service or aid with emergency assistance.

Ned Bowman, the executive director of the Florida Petroleum Marketers Association, answered a succinct “no” when asked if he saw any difficulties in truckers and others obtaining diesel supplies in the region.

“You do get some problems at first because everybody sucks it out to get refilled as fast as you can,” Bowman said. “Everybody runs to the pump.”

Bowman was in Fort Myers, Florida, the heart of the area hardest hit by Hurricane Ian last week, when he spoke to FreightWaves. He said there are some retail outlets that were damaged and may be closed for “a while,” he said, noting specifically that RaceTrac — a big retailer in Florida — is “up and running.”

Bowman also ticked off a list of the state’s wholesalers that supply retail outlets. They would be among the first companies to feel the impact of a drop in supply to the region, but Bowman said they are all “fine.”

GasBuddy, which tracks mostly gasoline, has been reporting on station outages in the area since the storm first hit. While there remain more than a third of Fort Myers stations out of fuel, that number there and in other areas is dropping. 


There has been no upward price movement at the retail level in the affected areas, at least according to the downloadable Pilot Flying J spreadsheet

On Tuesday, for its outlets in Ocala, Haines City and Fort Myers, all located in the area where Ian made landfall and did its heaviest damage, prices were listed at the same level as last Wednesday, the day the storm hit. Ocala and Haines City were carrying diesel at $4.999 per gallon, and Fort Myers was at $4.649, all unchanged in the past six days.

That sort of stability is not being seen in California. There has been significant attention recently on record-high gasoline prices in the Golden State, driving the spread between the national average retail price published by the Energy Information Administration to previously unseen levels. The EIA publishes average gasoline prices on Monday, the same day it posts the weekly average retail diesel price, which is used as the basis for most fuel surcharges.

The spread for California gasoline posted Monday was a whopping $2.431 per gallon, with the national average gasoline price at $3.782 and the California price at $6.213. That spread moved up roughly 53 cents in one week. A year ago, the spread was roughly $1.05.

Numerous refinery problems in California have led to the state’s current surge in gasoline prices, according to several analysts. But the movement in diesel has not been as pronounced. 

The price posted Monday of $6.077 a gallon for California is not a record, since it actually has dropped five weeks in a row, as has the national average. But the spread between the two of $1.241 a gallon is the widest it has been in the history of the EIA data.

In a response to a FreightWaves tweet on the spread, David Hackett, the chairman of Stillwater Associates and a longtime expert on the West Coast fuels market, said the West Coast market is structurally more “long” diesel, making it less susceptible to the sort of huge price surge seen in gasoline.

That structure can be seen in the export figures. As a whole, the U.S. is a net exporter of diesel, with most of it coming out of the Gulf Coast. 

But in PADD 5, the government designation for the West Coast region, ultra low sulfur diesel exports in July, the most recent full-month available, were about 10% of demand. But in PADD 1, the East Coast, that figure was closer to 5%, suggesting a greater ability on the West Coast to export surpluses. 

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John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.