Diesel price relief next year

The ever increasing diesel prices rises are expected to fall next year according to a report by the International Energy Agency (IEA).

After the peak demand of the Northern Hemisphere winter, prices are expected to soften with an increased capacity to produce the fuel.

Natural gas shortages like the one in Western Australia caused by a pipeline explosion have also led to diesel being diverted into the power industry. The natural gas shortage in WA has seen many mines resorting to back up diesel energy generators. Gas supplies from the Apache pipeline are expected to resume before the end of 2008.

”Both crude and middle distillate markets may see some respite in the second half of 2008, but more likely by early next year,” said the IEA in its monthly Oil Market Report. ”Supplies should increase over the second half of the year and into 2009 as new refining capacity comes on stream in both China and India.”

The bad news is, the report does expect continuing high prices for the rest of the year but the New Year should bring some relief to truck operators, especially those in smaller fleets struggling to pass on the full effect of price rises to their customers.