Crack Spreads Explode: Why Diesel and Gasoline Prices Are Skyrocketing

The recent surge in diesel and gasoline prices has left many wondering why crude oil prices aren't rising at the same rate. However, experts point out that the link between crude oil and pump prices is not as straightforward as it seems.

The main market change today is the widening crack spread, which refers to the difference between the value of refined fuels and the cost of crude oil. The diesel crack spread has risen to $69.69 per barrel, compared to a historical average of $20.00, while the gasoline crack spread has surged to $45.19.

This means that refineries are adding a significant amount as compensation for processing crude oil into finished fuel. The U.S. Energy Information Administration notes that high crack spreads, along with increased crude prices, are major factors driving up gasoline and diesel costs.