Businesses have been struggling with the high cost they have to pay due to the increase in prices of not only fuel but also any automotive fuel, lubricants, or other supplies needed to operate diesel engines in vehicles and machinery.
Using these lubricants and automotive fuels is very important as lubricants keep the engine running, and automotive fuels such as DEF play a huge role in controlling harmful emissions in the air we breathe due to diesel fuel engines. It, however, makes us wonder, while having a great demand, why is DEF so expensive?
This article will help you discover why there has recently been a significant increase in the price of DEF.
What is DEF?
Diesel Exhaust Fluid (DEF) is a clear liquid that consists of a mix of two significant liquids: urea and water. DEF is used in diesel engines to neutralize the emissions produced by nitrogen oxides (NOx) into harmless gases.
It also helps increase the efficiency of diesel engines while lowering their temperature while running.. It is a highly important fluid that hugely impacts companies running on diesel fuel.
Why is DEF so expensive?
According to the American Petroleum Institute, DEF is a mixture of urea 32.5 percent and deionized pure water 67.5 percent.
The United States Environmental Protection Agency has made it mandatory for any machinery or vehicles that have a diesel engine to use DEF since 2010 to reduce harmful emissions in the air we breathe.
Since urea is in high demand, it is synthetically produced on a large level with different quality grades. DEF, however, uses high-grade Urea, which is quite expensive and significantly contributes to the increase in the price of DEF.
You can maintain a supply of high-quality DEF for your business by opting for Fuel Logic. You are just one call away from getting nationwide delivery of fuel such as diesel, gasoline, and DEF directly to equipment/trucks, into bulk tanks, or generators.
Another reason why there has been an increase in diesel exhaust fluid prices is in recent years; several factors have affected the price of urea. These factors are mentioned below:
- Supply issues: Urea that was exported from China to the west coast of the US has stopped because China has decreased its production due to its harmful effects on the environment, as most production happened near areas with human settlements. Hence, this decrease in supply will maintain its impact on pricing.
- Impact of urea pricing on DEF pricing: urea prices have fluctuated since 2021. According to the United States Department of Agriculture, urea prices increased by 149 percent by December 2021. It is observed that the prices have dropped after that but at a very slow rate and are still higher than they were before 2021.
- Effect of Ukraine/Russia war: Due to the war, the price of natural gas has increased, parallel to the cost of urea, causing it to rise. The price of DEA-grade urea, which is used in making DEF, also increased as Russia, the top exporter of fertilizer products, stopped its supply. The war is negatively affecting the price of urea and will possibly have the same effect on it in the future.
- Impact of drastic changes in urea prices over time: While the supply of urea is not meeting the market demands as much as it should, the costs will tend to stay higher and unstable even in 2023, according to jobbersWorld.
- Tariffs imposed by the American government in 2018: Tariffs were imposed on China to import urea, causing a supply chain issue. However, this gap was filled by other countries such as Nigeria, Trinidad, and Russia, which were again affected by the Ukraine/Russia war. These tariffs were later removed from urea imports from Russia and Trinidad.
How to avoid the changes in the price of DEF?
Now we know the reason why DEF is so expensive. It is important to understand that it is due to all the issues mentioned earlier related to urea. Hence, here are some ways we can adopt to avoid the changes in prices as long as we can or the worst-case scenario, prevent a shortage of DEF:
- Have a sufficient supply of DEF: As a business, you should devise smart ways to decrease costs. Hence, the best you can do is increase your storage capacity of DEF so you have the optimal supply for as long as DEF can last. Don't forget to store it in the optimal conditions required, as DEF can have a year's shelf life but can be prolonged if stored properly.
- Increase the storage capacity: this can be done by storing the maximum amount of DEF in your inventory. Its capacity can be increased to do that. It may be expensive for your business, but it will help you in the future to avoid price changes. They don't affect your business as long as you have redundant supplies.
- Automated contact with the supplier: Since DEF shortage is possible. It will help if a business maintains the DEF supply so its shortage does not instantly impact the business. You can place your order at Fuel Logic to avoid supply issues, as we provide hassle-free delivery nationwide.
Fuel Logic: The simple solution
With the fluctuations in diesel exhaust fluid prices globally, it's been a difficult time for businesses in the US. DEF was made mandatory in 2010 for the road fleet and all off-highway vehicles using diesel engines in 2015. In America, every vehicle with a diesel-powered engine, whether medium or heavy duty, should have DEF used to avoid harm to the health of all living beings.
By using tips and tricks from this article, you can maintain a steady supply of DEF and avoid any issues that you may face in the future by not having any such knowledge.
Contact Fuel Logic for convenient nationwide DEF delivery.
