Diesel Rationing Could Hit East Coast This Summer

Diesel Rationing Could Hit East Coast This Summer, Refinery Owner Says

Friday, May 13, 2022 - 01:25 PM

By Alyssa Sporrer of FreightWaves,

The East Coast of the U.S. could face a worsening diesel shortage this summer, John Catsimatidis, CEO of United Refining Co., said in an interview with Bloomberg. United produces some 70,000 barrels of petroleum products each day and sells gasoline throughout western New York and northwestern Pennsylvania, according to the company’s website.

“I wouldn’t be surprised to see diesel being rationed on the East Coast this summer,” Catsimatidis told Bloomberg’s Lucia Kassai.

“Right now inventories are low, and we may see a shortage in coming months.”

Diesel prices hit a new high of $5.557 a gallon on Thursday, according to the American Automobile Association. Unleaded gasoline also hit a record $4.418 per gallon.

Carriers and owner-operators — especially those with already-slim margins — are struggling to keep up with rising diesel prices.

Catsimatidis said he doesn’t expect the 350 stations United Refining operates to be low on gasoline; it will just be very expensive. “Drivers will pay the highest gasoline prices ever paid for Memorial Day.”

National diesel inventories are the lowest in 17 years, and East Coast stockpiles haven’t been this low since 1990, according to the Department of Energy.

Several truck stop chains and fuel providers have commented on the possibility of rationing. Pilot Flying J is aware of tight diesel markets, especially in Virginia and Georgia, and is “closely monitoring the situation,” the company told FreightWaves.

Benchmark administrator General Index supplied FreightWaves with an assessment on Tuesday that indicated that tightness in East Coast diesel stocks may be loosening.

The U.S. has increased diesel exports to help supply Europe with previously Russian-supplied fuel. But higher prices of diesel on the East Coast may impact how much diesel companies send to Europe, where prices are slightly lower, FreightWaves’ John Kingston reported.

On Monday, the General Index price for ultra low sulfur diesel was about $3.90 per gallon in Rotterdam, Netherlands, and $4.30 a gallon on the East Coast of the U.S.

An International Energy Agency report released Thursday indicated that the current diesel crisis may just be at the beginning. It said oil losses from Russian output were about 1 million barrels per day in April, and that number could jump to 3 million barrels per day by the end of the year.

“Limited spare capacity in the global refining system, together with reduced exports of Russian fuel oil, diesel and naphtha have aggravated the tightness in product markets, which have now seen seven consecutive quarters of stock draws,” the report said.

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The Interior Department will not move forward with planned oil and gas lease sales in the Gulf of Mexico and Alaska’s Cook Inlet, it announced Wednesday night.

A spokesperson for the department confirmed the Cook Inlet lease sale would not proceed due to insufficient industry interest. Meanwhile, the planned sale of two leases, lease 259 and lease 261, in the Gulf of Mexico will not proceed due to contradictory court rulings on the leases, the spokesperson confirmed.

Shortly after taking office, President Biden signed an executive order freezing all new oil and gas leasing on federal lands. Last summer, Judge James Cain, a Trump appointee, struck down the ruling, prompting the Biden administration to appeal.

Meanwhile, in January, the Washington, D.C., District Court invalidated another Gulf of Mexico lease sold by the federal government, lease 257. The administration is not appealing the January ruling, although it affects a separate lease from the ones named by the Interior spokesperson.

The Alaska lease would have covered more than 1 million acres. The federal Bureau of Ocean Energy Management previously canceled lease sales in the area in 2006, 2008 and 2010, also citing lack of interest from industry at the time.

Under federal law, the Interior Department is required to adhere to a five-year offshore leasing plan, which was set to end at the end of June in the case of the affected leases.

The announcement comes at a time when the president’s approvals have plunged on economic issues in particular, and congressional Republicans have blasted the administration’s energy policies after average nationwide gas prices reached an all-time high earlier this week.

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Say what you will about Trump but NONE of this shit was happening while he was president.

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Biden doesn’t really care about peasants and will cull as many as he can

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The pathetic thing is this hurts poor people much more than the wealthy. Biden is fucking his voters in the ass.

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Well, I’m soon to be fucked (CA Cummins p/u driver).

Biden will say none of this would be a concern if we didn’t have electric semis

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Yea, I’m sure the “Govern me harder, daddy” crowd will care when they all view the alternative as far right Nazis.

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There’s gonna be this kind of pushed. Forced.

81 million votes though…

At least no mean tweets lol.

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Save your money, shit is very close to the fan.

Obviously because Biden has the economy on fire!

I’ve only recently been taking worries about food shortages seriously, now every week I buy 15-25 pounds of dry long lasting food, currently probably have about a years worth. Would like to get to 2 years minimum. Maybe get the rice up to 3-5 years, it doesn’t take much space, and that’s an apocalyptic amount of food.

Probably have 6 months of dog food too.

Enough ammo and guns to defend it.

Your boy staying tubby whether it’s a food shortage or not.

I remember my dad freaked out in the 2008 recession and bought a bunch of dry food, I thought he was a crazy person. I mean we just ate it once things calmed down, it’s not like he bought that food and it’s only edible in an emergency.

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Trump is called “divisive” because the tv said he was.

Many are now using that term for why it’s better he’s not in office, lol. His biggest enemy was the media who attacked daily and at every press conference. You know, those things the former President showed up to and took on a biased and hostile press every single time. lol @ China Joe doing that.

Next election is an IQ test. TRUMP 2024!!

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What democrat doesn’t? It’s always trumps fault though… dumb fucks

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