Diesel Fuel Prices Starting to Fall

Diesel fuel prices are falling offering relief to truckers and other operators of diesel-powered vehicles. However, prices still remain at historical highs.

The U.S. Energy Information Administration (EIA) reports diesel is at $4.537 at the start of the year, down $0.059 from the week prior and 43 cents from Dec. 5. The cost per gallon, however, is still $0.922 higher than the same week in 2021.

The average price has remained over $4 a gallon since February 2022 for diesel fuel that's used to transport most goods purchased by U.S. consumers. But sections of East and West coasts are still seeing prices above $5.

Patrick De Haan, the head of petroleum analysis at GasBuddy, told Detroit News there are several factors causing the historically high prices.

The first is that U.S. diesel production remains low. Two thirds of a barrel of crude produces gasoline while just one third becomes diesel, he said, noting that when oil refineries have production issues, diesel output is most affected.

The war between Russia and the Ukraine also has had an impact, he says, by reducing the amount of oil transported from Russia to the U.S.

"Russia produces a lot of heavy oil, that heavy oil produces ... diesel, and because countries aren't importing as much of that heavy oil, the refineries (in the U.S.) aren't able to produce as much heavy product like diesel," De Haan told Detroit News.

Refining capacity is also diminished, decreasing by about 4% since 2020. According to the EIA, there were 135 operable refineries in the U.S. in 2020 and just 130 at the beginning of 2022.