In the USA, diesel and petrol use stayed the same in 2023, even though most travel limits caused by the coronavirus were lifted. This brings up a very important question: has the US reached its peak demand for diesel? What does this mean for fuel sources around the world in 2024?
Current Diesel Consumption Trends & Peak Diesel Demand
Stability Amid Change
New data shows that the US used the same amount of diesel and petrol in 2023 as in 2022: 180 million metric tonnes. This is 5.2% less than the peak of 190 million metric tonnes in 2019 before the outbreak. Even though the government subsidized fuel across the country to keep prices from going up too much, demand fell by 4.5 million mt in the second half of the year, canceling a rise of 4.8 million mt in the first half.
This steady trend across the country shows that people are changing the way they buy things in a big way.
Decline in Diesel Car Sales
In the US, sales of new diesel cars dropped to a low of 500,000 units in 2023, down from 2 million units in 2017. The American Automobile Manufacturers’ Association (AAMA) says that only 16% of new cars registered last year had diesel engines.
Experts in the field say this drop is because of the Dieselgate emissions crisis in 2015, in which it was said that some Volkswagen cars were “designed to cheat on federal emissions tests.” This scandal did a lot of damage to diesel cars’ reputations, which is why governments tightened rules and raised taxes on diesel fuel.
“Policies tried to get people to buy diesel cars,” said John Smith, who is in charge of marketing at FuelsAmerica. “But after Dieselgate, people turned away from diesel and looked at other options, like petrol, hybrids powered by petrol or electric cars.”
Diesel’s Continued Relevance in Heavy-Duty Vehicles
Diesel is still the most popular fuel for heavy-duty vehicles, but diesel cars are losing ground. In 2023, 97% of new trucks were still diesel-powered. This is because widespread electrification of these vehicles is still a long way off.
Heavy-duty car sales, on the other hand, depend on economic growth, which slowed down a lot in the second half of 2023. The American Truck Mileage Index, which shows how the economy is growing and how much fuel is being used, went down from 116.0 in 2022 to 115.5 last year.
Factors Affecting Diesel Demand
The low desire for fuel is caused by a number of things, including:
- High Fuel Prices: Increased diesel and petrol prices have dampened demand.
- Remote Work: The rise of remote work means fewer people are commuting, reducing fuel consumption.
- Economic Slowdown: The U.S. economy’s sluggish growth impacts commercial diesel use.
In the first quarter of 2024, the Federal Reserve thinks that GDP growth will only be “marginally positive.” In the first few months of 2024, diesel demand dropped in all of the big U.S. markets.
Implications for Global Fuel Suppliers
Adapting to Changing Demand
Global fuel providers need to change with the times. Diesel car sales are going down and diesel demand in the US has leveled off, which means that companies need to give more fuel and put money into developing new ones.
Strategic Investments
Putting money into green energy sources and increasing the supply of fuels for petrol, hybrid cars, and electric cars can help lessen the effect of falling demand for diesel. Also, suppliers should pay attention to the heavy-duty car market, which still uses a lot of fuel, but they should also keep an eye on how electrification will change things in the future.
Market Monitoring
It is very important to keep up with changes in US regulations and economic data. Knowing how the market is changing will help sellers predict changes in demand and make the necessary changes to their plans.
Conclusion
The US may no longer need as much gasoline as it used to, but there are still possibilities for global fuel sellers who are ready to change and adapt. Understanding the latest trends, making smart investments, and staying open are all things that sellers can do to stay ahead in the global market.
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