How Low Will Diesel Go?

Author: Markee Bittner   Date:

As of December 18th, 2018 diesel fuel was at its lowest point since April of this year. The United States average price per gallon for on-road diesel is currently at $3.121.

Here is a look at what on-highway diesel costs in different regions of the U.S. according to the Energy Information Administration (EIA).

Gulf Coast region- $2.900/gallon

New England region- $3.276/gallon

Midwest region- $3.018/gallon

Rocky Mountain region- $3.178/gallon

West Coast not including California- $3.313/gallon

Lower Atlantic region- $3.021/gallon

Central Atlantic region- $3.342/gallon

The state of California has the highest priced diesel at $3.835 per gallon. Supply issues and taxes are two reasons why California has higher diesel fuel prices. (2.) 

The Rocky Mountain region had the biggest drop from the prior week by $0.061. 

According to the EIA, diesel fuel prices were up this time last year by $0.165-$0.352 per gallon.  

Historically, we have seen diesel prices fall in or around the month of December and then begin rallying again at the turn of the New Year. 

What causes diesel prices to rise and fall? The biggest factor is the price of crude oil. According to the EIA, the cost of crude oil accounted for about 55% of the monthly average U.S. retail on-highway diesel fuel prices from 2008 through 2017.

Other factors include the international diesel fuel demand, the imbalances of the U.S. diesel fuel supply and demand, transportation costs, seasonality, and regional operating costs coupled with local competition.

 

Pictured below is what we as consumers pay for in a gallon of diesel fuel:

  1. https://www.eia.gov/petroleum/gasdiesel/
  2. https://www.eia.gov/energyexplained/index.php?page=diesel_factors_affecting_prices

 

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