Amid the recent escalation of tensions in the Middle East disrupting global oil supplies, diesel prices in the United States have seen a general increase, with California being particularly hard-hit.
According to data from the fuel price tracking platform GasBuddy, San Francisco became the first city in the United States to see diesel prices surpass $8 per gallon last Saturday.
The platform’s oil analysis director, Patrick De Haan, stated on the 4th that the average diesel price in California had risen to $7.63, significantly higher than other regions in the US. He noted that currently, seven states have diesel prices exceeding $6.
On the morning of the 6th, De Haan posted on social media platform X that the national average diesel price was $5.57, and predicted that gasoline prices could rise to $4.20-4.35 in the coming days.
Diesel is a crucial fuel for economic operations, powering trucks, ships, agricultural equipment, and construction machinery. Rising diesel prices can lead to increased transportation and production costs, subsequently causing inflation in food, consumer goods, and services.
Compared to gasoline, diesel supply is usually tighter due to its different refining process and competition with aviation fuel and heating oil for refinery capacity. Global disruptions in supply further squeeze inventories of middle distillates.
While diesel prices in most other regions of the United States are stabilizing, prices in California remain noticeably high. The latest data from the US Department of Energy shows that in the last week of March, diesel prices in the US rose by only 2.6 cents, with declines in three regions.
However, unlike many states, California lacks major interstate pipelines connecting external crude oil or finished product supplies, relying heavily on imported oil from Alaska and overseas via shipping, rail, or truck transport. California also relies on in-state refineries, whose capacities are limited due to planned closures.
Moreover, California’s transportation, agriculture, and maritime industries still heavily depend on diesel, with demand remaining high even as prices increase.
Furthermore, California mandates the use of a special fuel formulation to reduce emissions of gases and benzene that cause smog. The US Energy Information Administration states that while this fuel is cleaner, its higher production costs stem from additional processing and more expensive blending components. Combined with one of the highest fuel taxes and environmental fees in the country, California’s fuel prices are further driven up.
According to data from the American Automobile Association, as of the 6th, the national average price for regular gasoline is around $4.12 per gallon, while the California average is about $5.92, a difference of $1.80.