Photo: Tony Webster / Wikimedia Commons (CC BY 2.0)
US diesel prices fell below $6 a gallon on average on Saturday for the first time in two months, retreating from record highs as easing geopolitical tensions and weaker seasonal demand bring relief to truckers, farmers and businesses.
The national average retail diesel price was $5.998 a gallon on Saturday, according to fuel price tracker GasBuddy, ending a run above the $6 mark that began in September.
A record run above $6
Diesel prices surged through the autumn as the US-Israeli war against Iran disrupted oil supplies and Ukraine’s systematic attacks on Russian refineries squeezed production. The national average rose to $5.820 a gallon on September 3, breaking the record set after Russia’s full-scale invasion of Ukraine in 2022. It topped $6 a gallon on September 10 and hit a record $6.519 on September 22. In California, where refining capacity is constrained and fuel specifications are stricter than elsewhere in the country, diesel prices briefly exceeded $10 a gallon.
Elevated diesel prices, a key driver of transportation and freight costs, pushed up overall inflation and caused pain for consumers, farmers and businesses. High fuel costs were a major factor helping Democrats sweep both houses of Congress from President Donald Trump’s Republicans in this month’s midterm elections.
Why prices are falling
Several forces are now pulling prices down. Brent crude futures, to which diesel prices are closely linked, are down 18.5 percent over the past two weeks as geopolitical tensions have eased. Demand typically softens in the autumn as people drive less, hurricane season winds down and the risk of Gulf Coast refinery disruptions declines, said Patrick De Haan, GasBuddy’s head of petroleum analysis. Refinery maintenance is also largely completed by November, allowing production rates to recover.
The same forces have pushed gasoline below $4 a gallon this month for the first time since August 10, according to GasBuddy data.
Relief, but limited
The Trump administration has introduced several measures aimed at easing fuel costs, including temporarily lifting federal taxes on red-dyed diesel, easing sanctions on Russian fuel and launching an $8 billion support programme to help farmers offset higher fuel costs during the autumn harvest. Those measures, however, provided only limited relief while supply concerns caused by the ongoing Iran war continued to dominate the market.
Whether the drop below $6 lasts will depend on whether the easing in tensions holds and crude prices stay lower. The US-Israeli war against Iran, which began in February, remains the main wild card: any new escalation could quickly reverse the decline. For now, though, the first sub-$6 average in two months marks a turn in a fuel-price surge that shaped the autumn’s politics and squeezed household budgets across the country. Trucking firms, which move most of the country’s freight by road, have warned that sustained high diesel prices feed directly into the cost of food and consumer goods.
Source: Reuters, GasBuddy