US retail diesel prices have climbed to a record nominal level of $6.29 per gallon, marking the highest figure recorded since the US Energy Information Administration (EIA) began tracking the series in 1994.
The sharp increase comes as global distillate fuel supplies remain tight, inventories stay below seasonal averages and crude oil prices remain elevated. The EIA also expects global distillate production to remain below last year’s levels in the coming months, which could keep diesel prices under pressure.
Diesel Price Reaches Record Level
According to the EIA’s weekly Gasoline and Diesel Fuel Update, the average US retail diesel price reached $6.29 per gallon for the week ending September 14.
The agency said that after adjusting for inflation, the price is the highest since 2022. However, in nominal terms, the latest figure represents the highest level recorded since the EIA started publishing the diesel price series in 1994.
Diesel prices are affected by several factors, including crude oil costs, refinery margins or crack spreads, retail margins, distribution expenses and taxes. The EIA said tighter global distillate supplies and higher crude oil prices have contributed to the recent increase.
US Diesel Inventories Remain Below Average
US distillate fuel production averaged 5.1 million barrels per day (bpd) between January and August this year, the highest average level since 2019.
Refinery operations have also remained close to full capacity. Refinery utilisation reached 97% during the week ending September 11, according to the EIA.
Despite the usual seasonal increase in distillate inventories during the summer, US stocks have remained largely unchanged this year. By September 11, distillate inventories were 15.8 million barrels, or 13% below the five-year seasonal average for 2021–2025.
The relatively low inventory levels have also contributed to stronger refining margins.
EIA Expects Diesel Prices to Stay Elevated
The EIA expects global distillate fuel production to remain below last year’s levels over the coming months. The agency said this could contribute to continued high net exports, low inventories and elevated diesel prices.
Higher diesel crack spreads, combined with increased crude oil prices, have further pushed up retail diesel costs.
The impact could extend beyond fuel bills. The EIA noted that expensive diesel can increase road and rail freight costs, affecting the transportation expenses associated with goods. Diesel also plays an important seasonal role in agriculture and home heating in the northeastern United States.
What Higher Diesel Prices Could Mean
With diesel prices already at record nominal levels, continued supply constraints could keep pressure on transportation and other sectors that rely heavily on diesel fuel.
Low inventories and expectations of weaker global distillate production remain key factors for the diesel market in the coming months, while crude oil prices and refinery margins will continue to influence retail prices.
Disclaimer
This article is intended for general informational purposes and is based on the information provided by the US Energy Information Administration. Fuel prices and market conditions can change over time due to supply, demand, crude oil prices, refinery operations and other factors. Readers should consider the latest official data before making financial or business decisions based on this information.