"Unpacking the Dynamics of Diesel Prices: Insights from the U.S. Energy Information Administration (EIA)"

The price of diesel fuel is made up of several components, including the cost of crude oil, the cost of refining, distribution and marketing, and taxes imposed by federal, state, county, and local governments. The relative share of these components in the retail price of diesel fuel varies depending on the time and location of sale in the US.

Crude oil costs account for the majority of the price of diesel fuel

The cost of crude oil comprises around 50% of the retail price of diesel fuel in the US from 2003 to 2022. The cost of crude oil depends on the worldwide supply and demand for petroleum products, which are affected by global economic conditions. Head to What drives crude oil prices? to find out more about the factors that impact crude oil prices. Since diesel fuel is one of the primary transportation fuels in the US, economic trends can influence the demand for diesel fuel.

Global demand for distillate fuel affects US diesel fuel prices

The price of diesel fuel in the US can also be influenced by international demand for distillate fuel. This is because heating oil, which is similar to diesel fuel, is used by many nations for electricity generation and as a substitute for diesel fuel in cars. The shift in demand for heating oil can affect the price of diesel fuel in the US.

Fluctuations in supply and demand can cause diesel fuel price fluctuations

Diesel fuel prices in the US are prone to fluctuation due to supply and demand imbalances. The US transportation sector depends entirely on petroleum, and if the supply of petroleum declines due to refinery issues or lagging imports, diesel fuel inventories can quickly decrease. Wholesalers and marketers may then offer higher prices for available diesel fuel, and if supplies cannot be transported quickly, the prices may remain high until balance is restored. Fluctuations like these are common in commodity markets.

Demand for distillate fuels is seasonal

While diesel fuel demand in the US is relatively stable and reflects the country's economic health, the price of diesel fuel can vary by season. Diesel fuel prices can jump during the autumn and winter months when heating oil demand also increases. Since heating oil and diesel fuel are produced at the same time, a seasonal surge in heating oil demand can affect the diesel fuel market, particularly in regions where farmers rely on diesel fuel for harvest season.

Transportation costs, regional expenses, and competition all play a role in diesel fuel prices

The retail price of diesel fuel also depends on the transportation cost, which is based on the distance between the retail location and the source of supply. Regions farthest from the Gulf Coast, which accounts for half of the US diesel fuel production, typically have higher diesel fuel prices. Additionally, regional operating costs, local competition, and the location and ownership of retail outlets can impact diesel fuel prices. Refiners own and operate some retail outlets, while others are independently owned businesses.

The expenses associated with running a business can differ greatly depending on the location of the dealer, with factors such as overhead, local real estate costs, and taxes playing a significant role. Even neighboring retail stations can have divergent patterns of traffic, costs, and sources of supply, which can directly impact the prices they charge. The count and situation of competitors in a specific area can also influence the price points.

High-volume truck stops that cater to large commercial vehicles typically sell diesel fuel at lower prices than smaller-volume service stations. On the West Coast of the United States, particularly in California, diesel fuel prices are typically higher than in other regions due to tax and supply issues. As of January 1, 2023, the total state taxes on retail, on-highway diesel fuel in California amounted to 76.20 cents per gallon, whereas the average of total state taxes across all 50 states was 33.88 cents per gallon.

California, in particular, is susceptible to supply conditions on the West Coast. Unlike other US markets that are linked by pipelines and river systems, the West Coast liquid fuels market is relatively insular and mostly reliant on in-region refinery production. This tendency towards isolation can make it expensive to transport supplies from outside the region in the event of a refinery outage. For more information on the transportation fuel markets in the West Coast region, refer to this PDF.

Information current as of April 19, 2023.

"Unlock the Secrets: Your Ultimate Guide to Golden Goose Sneakers"
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Curious about the Italian sneakers with a funny name that come pre-distressed and sell for a premium? Look no further than Golden Goose sneakers. First discovered while living in Milan, the Golden Goose Deluxe Brand has been on the fashion scene for 20 years, inspired by the skate culture of Southern

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Experiencing a feverish sensation even when there is no actual temperature can happen due to an array of reasons, from underlying ailments to hormonal fluctuations and lifestyle factors.Feeling hot or feverish can often be a signal of having an actual fever, but sometimes these sensations can occur

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Unlock the Secret to Cramp-Free Toes: Discover the Top 10 Reasons and Solutions for Relief
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Suffering from toe cramps can be caused by a variety of reasons, ranging from something as straightforward as dehydration to more severe underlying medical issues and rare infections. These random muscle contractions can affect not only your toes but spread to your entire foot or ankle.This piece

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"Instantly Resolve Roblox Error: Unable to Purchase Robux"
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Struggling to obtain Robux and replenish your Roblox account? Fear not, for we shall uncover the reasons why this happens and provide solutions, whether it's your fault or on behalf of Roblox Corporation, so you can ultimately purchase those elusive Robux.Before proceeding with the purchase, make sure

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