Boat diesel Fuel - what you need to know

Most folks don’t have the time or inclination to keep on top of the numerous trends in the marketplace that may impact their wallets.

Remember the different times in the past when the cost of eggs and poultry when going through the roof? I mean, they eventually went back down, but still... When that kind of thing happens, lots of people notice it. But they may not know that it’s because of an outbreak of bird flu that’s decimating chicken “flocks” across the nation. Specific to the egg and poultry thing, when prices shot up in 2015-16, because of the bird flu outbreak, 40 million chickens were killed just in the first half of 2015. Fewer eggs, more expensive chicken. Market forces ended up impacting household budgets.

This rule isn't just limited to consumers. Business owners, fleet operators, CFOs, budget managers….nobody has the time to stay on top of all the things that play out in the real world. That may end up costing their business time and money.

So today, we’re speaking to owners of diesel boats. We make a lot of resources for trucks and fleets and diesel fuel storage, yet we didn’t want to leave the marine diesel folks out. For boat diesel users, here are some changes from the recent past, that knowing about could be beneficial to you, your diesel boat(s), and your business.

Marine ULSD Fuel: You Can't Escape It

Onroad diesel fuels and marine diesel fuels have historically been virtually the same (except for the red dye that identifies one for different tax purposes). Around 2006-2007, the ultra-low sulfur diesel fuel regulations came about and we saw a divergence of on-road vs. off-road diesel. On-road diesel fuel was limited to 15 parts per million of sulfur content while off-road diesel (for boats and generators and other non-road uses) was allowed to retain a higher sulfur content.

This created some meaningful differences between the two kinds of fuels; differences that kept diesel boat owners smiling. More sulfur in marine diesel meant better resistance of microbes in storage and improved lubricity of marine diesel fuel.

That situation...was never supposed to last. There were about seven years (2007 to the end of 2014) when ULSD was transitioned into the marine sector. By the end of 2014, however, all off-road diesel fuel was required to be ultra-low sulfur.

More microbe problems in marine fuel

The most obvious consequence of the above is that more marine ultra-low sulfur diesel fuels are seeing microbial contamination problems. Anyone who stores and uses marine diesel fuel has the potential to be exposed to this. Storing fuel in marine environments is a perfect situation for bacteria and fungi to grow in marine diesel storage tanks because of all the water in the environment. Add in the continued ingress of ultra-low sulfur fuel and the potential for problems is amplified.

For those diesel boat owners who do find themselves “in this boat” (no pun intended), they will have to source a biocide solution to kill the microbes. There are options out there – ClearKill, Bellicide, Kathon, Biobor – but some are better than others.

price stability Issues

The marine diesel fuel market has seen some pretty dramatic swings in pricing over the last 5-10 years.

Back in May 2015, the national average gas price went up by 27 cents a gallon. The same average for diesel fuel went up only 4 cents a gallon. Gas prices and diesel fuel prices both went up 21-22 days in a row, but diesel fuel prices increased at a much slower rate. It seemed like diesel fuel prices were insulated to a greater extent.

But there have been other things that have impacted that market and contributed to big price changes. The big one happened in 2022, when the International Maritime Organization implemented new environmental regulations, specifically the IMO 2020 regulation which drastically reduced the allowable sulfur content in marine fuels.

This change led to an increased demand for Ultra-Low Sulfur Diesel (ULSD), contributing to a surge in diesel prices. The spread between the price of crude oil and diesel increased significantly in 2022 compared to 2021, which had a downstream impact on the retail prices of these fuels.

what to expect going forward

You would expect that if a regulatory change like that impacted pricing in that way, things would eventually settle out and prices would stabilize. Like with the poultry and egg thing from earlier. They did, in 2023, but there's always something new on the horizon which can threaten that.

If you're inclined to pay attention to the things that might force you to expect fuel price increase, pay attention to this kind of thing going forward:

1. Regulatory Impact: Environmental regulations, like the IMO 2020, can always be expected to have a significant impact on marine diesel prices. If further environmental regulations are introduced, or if existing ones are tightened, this could continue to influence fuel prices.

2. Oil Market Dynamics: The price of crude oil is a major determinant of marine diesel prices. Factors such as global oil supply, geopolitical tensions, and economic conditions significantly influence crude oil prices, and subsequently, marine diesel prices.

3. Global Economic Conditions: The state of the global economy can influence fuel demand. Economic growth typically leads to increased fuel demand, pushing prices up, while economic downturns might reduce demand and prices.

4. Technological and Alternative Fuel Advances: The development and adoption of alternative fuels (like LNG, hydrogen, or biofuels) and new marine technologies may impact the demand and pricing of traditional marine diesel fuel in the long term.

5. Geopolitical Events: Events like conflicts, trade disputes, or major policy shifts in key countries can impact the global oil market and thus affect fuel prices. You'd have to have been living under a rock not to know that the Russia-Ukraine conflict of 2022-on really did a number on fuel prices.

If you are interested in Boat Diesel, check out these other posts:

• Cleaner and Quieter Boats: Boating Business Saves with Dee-Zol
• Fuel stabilizer for boats: Why do I need one?
• Pre-Launch Checklist for Maintaining Your Boats Performance