(Bloomberg) -- Take a look at U.S. diesel demand to see that the supply chain squeeze isn’t going to end any time soon.
Demand for diesel is set to surge to highest since 2018 next year as truckers continue to work to clear a backlog of deliveries accumulated during the pandemic, the Energy Information Administration said in a report Wednesday. The agency predicts that consumption of the fuel, which has already surpassed where it was in 2019, will rise another 3% to 4.11 million barrels a day in 2022.
The expected increase in diesel consumption is an indicator that the supply chain crisis rocking companies from Apple Inc. to Toyota Motor Corp. could last well into next year. Surging demand, which contrasts with lagging gasoline consumption, may also mean higher costs for the trucking industry that will likely be passed to consumers at a time when inflation is a major concern.
Around the ports of Los Angeles and Long Beach, a gateway for imports of all sorts of goods from Asia, there’s a backlog of around 100 container ships waiting to discharge from computers to gardening equipment. President Joe Biden focused on transportation bottlenecks on Wednesday, with the congested port planning a 24 hours a day, seven days a week effort to confront the squeeze on goods.
Prices are set to remain high due to high oil prices and lower stockpiles of the fuel. Retail diesel is set to average $3.24 per gallon this year, the highest since 2014, and $3.23 per gallon next year, according to the EIA.
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