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And More November 17, 2022 2 mins read

American are Paying the Biggest-Ever Premium for Diesel as Its Price Skyrockets 50%

And More ı By Rochdi Rais

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gas station

The keen shortage of diesel in the US has sent prices up to a record premium compared with gas and crude oil, The Wall Street Journal reported Wednesday.

That has pushed prices paid by Americans at the pump skyrocketing, up about 50% this year to $5.35 a gallon as of Wednesday, according to AAA data. 

The figures represent a record $1.61 higher than the price of gasoline, which cost an average of $3.74 a gallon — a significant surge from the gap of just 23 cents a year ago.

Meanwhile, according to the EIA, New York harbor wholesale diesel prices traded at a record premium to crude oil benchmarks in October. 

Western sanctions against Russia after it invaded Ukraine in February have shaken global energy markets, tightening supply and sparking price shocks.

Gas prices have declined 26% since hitting an all-time high of $5.02 in June, AAA data shows, following a combination of plunging crude oil prices and a slump in demand.

But diesel buyers haven't enjoyed the same level of relief — prices have fallen just 8.1% from their June record of $5.82 a gallon.

That's because US diesel inventories have declined to extremely low levels, in large part because many refineries are out of commission. In October, EIA data showed the US only had 25 days' supply of diesel left in reserves — a low not seen since 2008.

In addition to hitting American drivers, high diesel prices are wreaking havoc on supermarkets and retailers that rely on freight transportation, as truckers pass on costs. Kroger and Hormel Foods are among those that have called out the costs — raising concerns about food shortages and higher inflation.

 

 

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Rochdi Rais

Rochdi Rais is the Head of Growth and financial and legal writer at USA Herald. He has been writing and editing financial, legal and U.S. news for years with over +4000 articles published during his career.

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