As farmers finish harvest and start sending crops to market, a shortage of diesel is keeping the fuel at historically high levels even as there is some easing in gas prices.
Diesel prices were averaging $5.32 a gallon nationwide as of Monday, up $1.59 from a year ago, according to the Energy Information Administration. California had the highest price regionally at $6.24 a gallon, up $1.60 from a year ago.
Gas prices were averaging $3.74 a gallon, 35 cents higher than a year ago.
Mike Steenhoek, executive director of the Soy Transportation Coalition, said the diesel shortage is a growing issue for farmers.
“I did an informal poll of a number of farmers scattered throughout the middle of the country late last week. Everyone is concerned with diesel costs,” Steenhoek told Agri-Pulse.
It matters where a farmer is located, however. “A couple farmers I corresponded with in western Tennessee describe diesel supply as ‘day to day,’ while others in other regions have mentioned supply challenges have yet to materialize,” he said.
Aviva Aron-Dine, deputy director of the White House National Economic Council, said the war in Ukraine is the primary driver behind both the increases in diesel and gasoline prices. She told Agri-Pulse the White House is monitoring the situation with diesel supplies, including in the Northeast, where supplies of diesel and other petroleum distillates, including heating oil and jet fuel, are “unusually low.”
“This is an issue that was absolutely top of mind for the president at the beginning of the war. He spoke to the fact that there would be an impact on energy markets and on prices, but also pledged to do everything in his power to reduce pain at the pump for Americans,” she said.
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Distillate supplies are at their lowest levels for the month of October since the EIA began reporting data on them in 1982, according to energy analyst Robert Rapier.
The primary reason for the tight supplies is a “cutoff of Russian imports. Prior to Russia’s invasion of Ukraine, the U.S. was importing nearly 700,000 barrels per day (BPD) of petroleum and petroleum products,” Rapier writes in a Forbes article. “Most of those imports were finished products and refinery inputs that boosted distillate supplies in the U.S.”
Other reasons for the diesel price spikes include the normal seasonal spike associated with harvest and a drop in refinery capacity as companies conduct routine maintenance, he said.
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