Diesel eases to $6.18, but dyed-diesel relief is thin and carriers are told to wait

Diesel is easing from its September record, but not by much, and the federal relief announced this month is unlikely to change a carrier's fuel bill. The U.S. Energy Information Administration put the national on-highway average at $6.179 a gallon for the week of Oct. 12, down 2 cents from the prior week and $2.514 above a year earlier.

That is the third straight weekly decline. EIA's weekly table shows the average peaked at $6.529 the week of Sept. 21, then slid to $6.382 on Sept. 28 and $6.199 on Oct. 5. Regional moves were mixed in the latest week: the Gulf Coast was lowest at $5.809, while the West Coast averaged $7.240 and California $8.091, both up slightly. EIA's next release is scheduled for Oct. 20.

The dyed-diesel order is narrower than it sounds

An Oct. 5 executive order directs Treasury and the IRS to provide penalty relief for highway use of dyed diesel through the end of 2026, and to study whether certain diesel tax payments can be deferred. Heavy Duty Trucking's Deborah Lockridge reported on Oct. 14 that this is not a tax repeal. Deferral means paying later, and the federal tax is 24.4 cents a gallon.

The American Trucking Associations' Henry Hanscom described it as a directive for temporary penalty relief, "not a blanket repeal." ATA advises carriers to wait for Treasury guidance before running dyed fuel on the road, and warns that dye can linger in fuel systems and raise warranty questions. Federal relief also does not override state fuel taxes or IFTA reporting.

Owner-operator group OOIDA expects minimal relief, and CEO Todd Spencer said every $1 a gallon costs its members about $400 more per week, according to the same report.

What it means for carriers

Crude is still the swing factor. FleetOwner reported on Sept. 30 that Brent was back above $106 a barrel as talks over the Iran war and the Strait of Hormuz stalled. Tom Kloza of Gulf Oil told Heavy Duty Trucking the $6.53 record could be topped by the midterms, and U.S. diesel futures rose about 5% by midday on Oct. 13, per NBC News as cited there.

On the rate side, DAT estimated that the fuel component of spot rates hit records in September: 84 cents a mile for vans, 92 cents for reefers and $1.01 for flatbeds. DAT's Dean Croke said rates typically take three to four weeks to catch up with diesel moves, so carriers who priced loads in the spike weeks may still be under water.

What shippers and brokers should watch

Fuel surcharge schedules keyed to EIA's weekly number will step down only slightly on the next reset. Check how often your schedule updates and what mileage band it uses, because a small weekly change can still shift cost on long lanes. Watch Treasury's guidance on dyed diesel before assuming any carrier cost relief will show up in quotes.

Track the weekly numbers on PDI's diesel prices page at /diesel.