GASBUDDY (WANE) The national average price of a gallon of diesel fuel has hit $5.16 a gallon according to GasBuddy, eclipsing the previous record of $5.15 set on March 10. The gap in price between a gallon of regular unleaded and diesel has also set a new record; diesel prices are now a dollar more than gas prices. The previous 98 cent a gallon record difference was set in November, 2008.

“While gasoline prices get much of the attention, diesel, which broadly is the fuel that moves the
economy, has quietly surpassed its recent record high as distillate inventories, which include
diesel and jet fuel, have plummeted to their lowest level in years,” said Patrick De Haan, head of
petroleum analysis at GasBuddy. “Should distillate inventories fall another five million barrels,
which is less than five percent, they will be at their lowest level in nearly 20 years, compounding
the problem. There’s no quick solution as the economy has seen a robust turn around, made
worse by Russia’s war on Ukraine as the West fences off Russia’s oil.”

Both diesel and gasoline prices spiked to record levels in early to mid-March, largely due to
Russia’s war on Ukraine and the response via sanctions on Russian energy. The recent
resurgence in diesel prices can be attributed to continued escalations in the situation and
plunging inventories of oil and refined products, like diesel, along with recovering demand as
goods move across the country, much of which is powered by diesel fuel in semi-trucks, trains
and ships.

Diesel prices in the Northeast are likely to rise above any other region due to the loss of refining
capacity from both Covid-induced shutdowns and a 2019 fire at the Philadelphia Energy
Solutions refinery in 2019. Combined, these issues have caused the loss of nearly half a million
barrels in refining capacity. Diesel prices are likely to remain at a substantial premium to
gasoline as imbalances persist, however, refiners are likely adjusting yields to produce as much
diesel and jet fuel. Economics favor production of these refined products and refiners chase the
higher market value of these fuels.