The Cheapest Region Just Crossed Six Dollars

The Gulf Coast was the last region under six dollars. It went to $6.027 this week.

For the first time, there is no region of the country left under six dollars a gallon. The Gulf Coast, which is the cheapest diesel in the United States and the region that covers Houston, came in at $6.027 this week.

It was at $5.754 seven days ago. That is 27.3 cents in one week, and the last line of defense is gone.

Why the cheapest region is the number that matters

The national average gets the headlines. It moved too, from $5.967 to $6.285, up 5.33% in a week and 15.24% over four weeks. But a national average is a blend, and blends hide the thing you need to know.

The Gulf Coast is the floor. It is where refining capacity sits, it is the cheapest number the EIA publishes every week, and for anyone running out of Texas it is the number that actually shows up on the pump. When the floor crosses a round number, everything above it already did.

That is what happened this week. The most expensive region, the West Coast, is at $7.25. California, the only state the survey breaks out separately, is at $8.039. Those are not new problems. The new problem is that the cheap end stopped being under six.

The four-week picture is worse than the weekly one

One week of movement can be noise. Four weeks is a trend, and the trend is steep.

The Gulf Coast was at $5.237 four weeks ago. It is up 79 cents, or 15.08%. The national average is up 83.1 cents over the same stretch, 15.24%. California is up $1.254, which is 18.48%.

The sharpest weekly jump was not in the expensive regions at all. It was the Lower Atlantic, PADD 1C, which went from $5.605 to $6.096 in a single week. That is 8.76%, and it crossed six dollars in one move.

What this does to a cost-per-mile number

If you calculated your cost per mile a month ago, it is wrong now, and not by a rounding error.

Take a truck averaging six miles per gallon. At the Gulf Coast price four weeks ago, fuel cost about 87 cents per mile. At this week's $6.027, it is a little over a dollar. That is 13 cents a mile that has to come from somewhere, and if your rate per mile did not move, it came out of your margin.

Over 10,000 miles in a month, that difference is roughly $1,300. The number depends on your actual fuel economy, which is the point: this is an arithmetic you have to run with your own figures, not accept from an average.

The spread between regions is its own problem

There is a second number in this week's survey that matters as much as the average, and almost nobody quotes it: the distance between the cheapest region and the most expensive one.

The Gulf Coast is at $6.027. The West Coast is at $7.25. That is a gap of $1.22 a gallon, in the same survey, in the same week, for the same product. On a 150-gallon fill, that spread is $183 of difference depending on where the needle happened to be low.

For a regional operation that never leaves one PADD, the spread is trivia. For anyone running long haul across the country, it is a planning variable. Where you choose to fill stops being a habit and starts being a decision worth a couple of hundred dollars per stop, and the gap has been widening rather than closing over the last four weeks.

The other half of that story is that the low end moved faster this month than the high end did in percentage terms. The Gulf Coast is up 15.08% over four weeks. The West Coast region is up 16.88%. Those are close enough that the spread held instead of narrowing, which is the opposite of what usually happens when a price spike is driven by a regional supply problem.

What to do with this before the next load

• Recalculate cost per mile with this week's price, not the one you used in August.
• If you quote flat rates, check whether the rate you agreed to still covers fuel at six dollars.
• Do not assume your region tracks the national average. The gap between the Gulf Coast and the West Coast is $1.22 a gallon this week, same survey, same week.
• Fuel economy is now worth more than it was a month ago. The same half-mile-per-gallon improvement pays 15% better than it did in August.

The EIA survey is weekly and regional. It does not publish a number for every state, and it does not publish one for Houston, so treat any figure you see labeled that way with suspicion.

When fuel moves this fast, the maintenance items that quietly cost mileage stop being small. If you want your unit checked against what it is actually burning, the shop can measure it.

Original source: U.S. Energy Information Administration