Retail stations aren’t likely to suffer from a widespread shortage of gasoline, analysts said, despite all the talk lately about a lack of tanker drivers to deliver the fuel as demand ramps up for the summer driving season.
“I wouldn’t forecast a shortage; I’m calling it a summer scramble,” Tom Kloza, global head of energy analysis at the Oil Price Information Service, told MarketWatch.
“ “I wouldn’t forecast a shortage; I’m calling it a summer scramble.” ”
The title of an article on CNN that ran Tuesday suggested that gas stations could run out of gas this summer.
The report, citing National Tank Truck Carriers, said that roughly 20% to 25% of tank trucks are “parked” heading into this summer due to a shortage of qualified drivers. MarketWatch contacted the industry trade group, but it hasn’t responded to a request for comment.
Kloza said there’s likely to be “plenty of refinery production of gasoline, lots of imports, and no problems at bulk facilities,” which refer to those big tanks near refineries and pipelines.
The problem is drivers, he said, and it’s in the “last one-to-150 miles in the distribution chain where tank truck driver counts are down.”
Kloza said a typical tanker truck carries 8,000 gallons. So on a day with 9.5 million barrels of demand, or just under 400 million gallons, the industry would need 50,000 tanker trucks just to handle station needs, he explained.
But the lack of truck drivers is not a new issue. COVID-19 accelerated it, as some drivers retired last year when demand was slow, says Jeff Lenard, vice president of strategic industry initiatives at NACS, which represents convenience and fuel retailers. There were also “challenges in getting new drivers certified” in schools during the worst of the pandemic, he said.
Meanwhile, demand for fuel has returned “very quickly,” said Lenard.
In a report Wednesday, the Energy Information Administration said U.S. motor gasoline product supplied over the last four weeks ended April 23, a proxy for demand, was up by 67.5% from the same period a year ago, to average 8.9 million barrels a day. Domestic supplies of the fuel also stand at roughly 3% below the five-year average for this time of the year.
Demand for drivers in the construction industry is also growing, Lenard said.
Brian Milne, editor and product manager at commodity analysis provider DTN, told MarketWatch there has been “strong competition for drivers, which we have seen on and off for the past few years, with “anecdotal examples” of drivers switching from one company to another, “amid the surge in ecommerce.”
Right now, “trucking activity is booming,” said Milne, pointing out that DTN’s proprietary Refined Fuels Demand data show U.S. diesel demand in April up roughly 5% from April 2019.
At the same time, as Lenard mentioned, fuel demand has rebounded.
Obviously, a gas station without gas won’t get much business, said Lenard. Gas stations, however, do benefit from sales at onsite convenience stores.
“Retailers are doing whatever they can to ensure supply, even if it cost more to do so,” said Lenard. “Fortunately, or unfortunately, our industry has a lot of experience in addressing shortages and outages and ensuring that the effect on the consumer is minimal.”
Some companies are either trying to offer incentives to keep drivers or offering incentives to acquire them from schools or from other businesses, Lenard said. “It’s something that goes beyond fuels and is affecting all industries dependent upon truckers,” though there is a “big difference between a package arriving a day later than expected, and a station not having fuel when you need it.”
For now, Milne said he has heard of some suppliers reporting delays in moving product because of “tightness in trucking.”
He expects that to continue during the summer, and “that could boost local fuel prices.”
“ Nationally, “I don’t expect to see supply shortages due to a lack of truck drivers.” ”
“Nationally, however, I don’t expect to see supply shortages due to a lack of truck drivers,” said Milne.
The EIA forecasts U.S. retail gasoline prices at an average of $2.78 a gallon in July.
On Thursday, AAA pegged the national average price for regular gas at $2.889, up from the year-ago average of $1.768. Front-month futures prices for reformulated gasoline RBK21, +1.08% settled at $2.07 a gallon on Wednesday, trading 47% higher year to date, according to Dow Jones Market Data.
Milne said the EIA’s forecast is reasonable, though the bias is “to the upside,” with his estimate at $2.80 to $2.90 a gallon, nationally. “We could reach $3” a gallon, he said.