High diesel prices strengthen the case for natural gas trucking

Imagine paying more than 70% less for fuel. That's the price difference some California fleets see as they turn to natural gas to help offset the highest diesel prices in the nation.

With California diesel prices topping $8 per gallon in October 2026, well above the national average of more than $6, fleets are finding relief with renewable natural gas (RNG), priced at approximately $2.28 per diesel gallon equivalent (DGE).

The math is compelling. At those prices, RNG costs roughly 72% less than diesel on a DGE basis. And the potential savings don't stop at the pump. Natural gas engines eliminate the need for diesel exhaust fluid (DEF) and diesel particulate filter regeneration, reducing certain maintenance requirements associated with diesel aftertreatment systems.

For Gazelle Transportation, California's largest crude hauler, the economics have reinforced a decision the company made six years ago. 

“It’s no surprise to anyone in 2026, diesel prices have gone through the roof, so I go to bed with a smile on my face every night knowing that over half of our fleet is powered by renewable natural gas,” said Gazelle President and CEO Ron Lallo.

The widening price gap between diesel and natural gas is also helping some fleets recover the higher upfront cost of natural gas trucks faster than expected.

“We're seeing customers today that are like superheroes within their organizations because they're getting paybacks on their trucks in a year or less. That's just superb,” said Cummins Business Development Director Mark Jamieson.

Gazelle began operating natural gas trucks in 2020 with seven Cummins ISX12N-powered vehicles. Today, its Bakersfield-based fleet includes 36 natural gas trucks, reflecting a shift in how the company evaluates the technology.

Initially, reducing emissions was a primary motivation. Now, operating costs are playing an increasingly important role.

“We have always looked at ourselves as being stewards of the environment so naturally that’s what kind of led us into CNG back in 2020,” Lallo said. “That’s when we purchased our first seven trucks and now it’s evolved more into an economic play. Obviously operating in California gives us a huge advantage considering that diesel is our number two operating expense.”

When Cummins introduced the X15N in 2024, Gazelle saw an opportunity to expand its natural gas operations into more demanding applications. Twenty-two of its 36 natural gas trucks are now powered by the 15-liter engine, which delivers up to 500 horsepower and 1,850 lb-ft of torque. 

“Naturally we’re always looking for the newest, latest, greatest, most efficient, lightest engine being a bulk hauler and the X15N fit that expectation,” Lallo said.

Other fleets are recognizing the X15N's potential to deliver diesel-like performance while supporting their operating cost and emissions goals.

Walmart, an early adopter of the X15N, has incorporated the engine into its transportation operations and reports positive driver feedback.

“It gives good power, gives good torque, gives a similar driving experience to the diesel and the drivers have really loved it and one of the big factors is total cost of ownership so we’re also seeing the TCO as well,” said Walmart Director of Sustainable Transportation Wayne Wilson.

For Paper Transport, driver experience and vehicle uptime are equally important considerations. 

“From the driver perspective that most important thing is the uptime of the vehicles,” said Paper Transport President and CEO Ben Schill. “You don’t smell like diesel after the day. You can hear the radio. It’s a nice ride but the most important piece is the uptime of the vehicle so that’s why we’re so optimistic about the 15-liter is to have a better sense of uptime as we move forward.”

RNG adoption gains momentum

Cummins supplies more natural gas engines for vehicles in California than any other manufacturer. From delivery vehicles and buses to heavy-duty trucks, its B6.7N, L9N, ISX12N and X15N engines power a wide range of commercial transportation applications.

Demand for natural gas technology has grown alongside the use of RNG, which is produced from organic waste sources and can offer substantial lifecycle greenhouse gas emissions reductions compared with conventional diesel.

Lower fuel prices, available incentives and corporate sustainability commitments are among the factors fueling its adoption.

According to The Transport Project, RNG use in California has increased more than 2,000% over the past decade. The organization also reports that California has more natural gas vehicles than any other state and that RNG accounts for 99% of natural gas used in the state's transportation sector.

Beyond potential operating savings, RNG can help carriers respond to customers seeking to reduce transportation-related emissions.

“You still have all of these international shipping companies that have sustainability goals,” explained Sean Wine, chief revenue officer at Clean Energy.

"That gives fleets the opportunity to say, ‘I've got a solution for you. RNG can lower your fuel costs compared with diesel and lower your emissions at the same time. I have RNG trucks that I can use on these lanes that are going to help you abate carbon and his your goals.’"

Depending on how it is produced, RNG can achieve very low or even negative lifecycle carbon intensity under California's Low Carbon Fuel Standard accounting methodology.

Those environmental benefits can complement the operational advantages of natural gas engines, including simpler emissions aftertreatment and reduced exposure to diesel fuel-price volatility.

“If they operate in California, it’s a no-brainer,” Lallo said. “When you’re looking at $8 diesel compared to $2 to 2.50 [natural] gas, it’s pretty compelling.”

Sizing up for success

Like any alternative fuel vehicle, a natural gas truck needs to be the right fit for the job. Fleet utilization, fueling access, vehicle specifications and upfront costs all influence whether the technology delivers a favorable return on investment.

Cummins, Clean Energy, Ozinga Energy and other members of The Transport Project can help fleets evaluate those considerations.

For Gazelle, high annual mileage is a major factor in the company's business case.

“You should look at your utilizations,” Lallo said. “The one thing that makes RNG a very compelling fuel for us is the fact that we are a very high utilization fleet. Some of our trucks run over 200,000 miles a year so when you trim that much cost off of our number two operating expense, it’s a pretty massive impact to the bottom line.”

Over-the-road trucks piling up mile after mile can achieve quicker returns through accumulated fuel savings. Regional hauling operations with predictable routes and reliable access to fueling infrastructure can also be well suited to the technology.

“Doing the same type of routes throughout the day, that's where you get your best payback and lowest total cost of ownership when you're using RNG trucks,” he said.

While no one has a crystal ball when it comes to diesel prices, fleets that can take advantage of more predictable natural gas pricing may find themselves in a stronger position to manage operating costs.

“Obviously, you have the high point now but there has always been a price difference between diesel and natural gas,” Jamieson said. “Natural gas prices have historically been more stable while diesel keeps driving people with uncertainty. And when you see operators getting that kind of payback on their equipment, it means they make more money going forward.”

For fleets willing to look beyond the upfront investment, the right combination of mileage, fueling access and vehicle performance can make a meaningful difference to the bottom line. And with California diesel prices hovering above $8 per gallon, that opportunity is becoming harder to ignore.