As Projected Diesel and Gasoline Prices Climb, Abundant Domestic Propane Offers Relief

Propane inventories near record highs, keeping domestic costs down and 2027 forecasts stable even as diesel and gasoline projections keep rising.

RICHMOND, VA. (September 17, 2026) — While diesel prices surpassed $6 per gallon, 2027 diesel and gasoline price forecasts are climbing rapidly as well, revealing an uncertain road ahead for operators banking on a “return to normal.” Meanwhile, near-record U.S. propane inventories and growing domestic production are helping keep projected 2027 prices steady, offering farmers, fleets, businesses, and public agencies a way to lower costs and gain more planning certainty by reducing exposure to global oil-market volatility.

“What’s most remarkable about the latest energy data is how unremarkable propane looks compared with the volatility of diesel and gasoline prices,” Michael Newland, director of agriculture business development for the Propane Education & Research Council (PERC) said. “The outlook for propane in 2027 is essentially where it was in February. We produce enough propane that the U.S. exports twice as much as we use domestically — a record 1.8 million barrels per day last year. That abundance gives operators a real competitive advantage, with many seeing considerable savings and predictability they can count on over the long term.”

The numbers tell a different story for propane:

• The 2027 outlook for propane remains stable. Diesel and gasoline rates aren’t expected to recover quickly: Since February, the Energy Information Administration (EIA) has raised its 2027 diesel forecast about 27% and its gasoline forecast about 14%. Meanwhile, its latest propane forecast is only about 1% higher than its February projection.
• While distillate inventories tighten, domestic propane supply is building. As of September 2026, propane inventories were about 22% above their five-year average.
• Propane prices have changed far less. In August, propane spot prices averaged within 3% of the same period last year while diesel spot prices were up 91% and gasoline prices up by 59%. Early September data shows propane spot prices have risen since, but still at a fraction of the pace and scale of diesel and gasoline.

Propane autogas powers on-road fleets, while propane serves agricultural operations and heavy-duty equipment like mowers and forklifts. Beyond mobile equipment, propane also supplies reliable energy for commercial and residential space and water heating, cooking, standby power, and EV charging. Across key sectors, operators are already leveraging propane’s price stability to protect their bottom lines and improve budget predictability:

• Commercial delivery and freight: McAbee Trucking kept fuel costs under $2.00 per gallon ($2.89/DGE) across its 27-truck propane autogas fleet — with rates shifting by just $0.05 all year — enabling it to expand from 4 to 10 USPS contracts.
• School transportation: Newport News Public Schools capped costs at $1.35 per gallon while diesel topped $5.09, generating $439,000 in single-year savings and $2 million over nine years, while Wa-Nee Community Schools paid $0.99 per gallon, saving $10,000 for every 30,000 miles driven with propane autogas school buses.
• Public and paratransit fleets: Kitsap Transit ACCESS averaged $1.82 per gallon YTD against $4.00+ gasoline, saving over $600,000 annually across 70+ propane autogas shuttle buses, matching Broward County Transit’s 10-year $1.34/gal average that yielded over $13 million in total savings.
• Agriculture: Trinity Fruit saves $6,000 to $14,000 per deep-well irrigation pumping cycle compared with diesel or electric power, respectively, while on-farm propane generation delivers power at $0.298 per kWh (26% lower than Tier 4 Final diesel) with 30% to 40% lower maintenance costs.
• Ports, logistics, and material handling: West Basin Container Terminal operates 128+ propane terminal tractors at $6.17/hr versus $8.14/hr on diesel — saving over $1 million annually with a 25% fuel spend reduction — while Port Newark Container Terminal is transitioning to a 100% propane terminal tractor fleet.

Research programs support operational efficiency

Across markets and applications, the Propane Education & Research Council (PERC) offers research programs that compensate participants switching to propane in exchange for reporting operational data. Visit propane.com to learn more about PERC research programs.

“High diesel and gasoline prices are forcing operators to re-evaluate their fuel strategy, but finding relief doesn’t require a single, one-size-fits-all technology,” said Jim Bunsey, senior manager, business development for PERC. “By focusing on the right energy for the right job, and matching propane to the applications and duty cycles where it excels, operators can simplify fleet operations, cut costs today, and reduce exposure to global energy disruptions.”

For more information about propane, visit propane.com.

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About PERC: The Propane Education & Research Council is a nonprofit that provides leading propane safety and training programs and invests in research and development of new propane-powered technologies. PERC is operated and funded by the propane industry. For more information, visit Propane.com.