Supply-Demand for Fuel Prices
On October 31, the average diesel price was $5.32 per gallon, while gas averaged $3.86.
American Farm Bureau Federation Senior Economist Veronica Nigh says it’s a simple supply and demand issue …
NIGH … “Back in March, the U.S. banned imports of Russian oil and Russian petroleum products. While we only get three percent of our oil from Russia, we get 20 percent of our petroleum products from that country. And a lot of those petroleum products that we were importing are used to make diesel fuel. We’ve also seen some downturn in production as refiners have been taking their plants down for maintenance.”
Nigh says gasoline tends to peak in the summer when Americans are on the road for vacation …
NIGH … “Whereas diesel demand tends to increase in the fall and the winter with increased trucking as retailers are stocking their shelves for the holidays. Of course, farmers are using more diesel during harvest. And as folks are using a lot more heating oil as the temperatures drop. So, it's a combined supply and demand issue really going on here with diesel that is separating it from gasoline prices.”
Nigh adds there are regional differences in availability of diesel. Nationwide we're down about 17% relative to the same time last year, with the East Coast down 37%, the Midwest down 15%, and the West Coast and Rocky Mountain regions down 11 and 9% respectively.