Diesel Price Surge Blamed on Refining Capacity Shortage
US retail diesel prices hit an all-time high of $5.85 per gallon on Friday, according to OPIS data reported by The Wall Street Journal.
This is $2.14 above where it sat a year ago and marks the first time diesel has exceeded this price point. However, experts say that only 27% of the increase can be attributed to the current high crude oil prices.
The remaining 73% is due to the rising costs of refining, distribution, taxes, and retail margins, which have increased by 1.7 times their year-ago size and account for $1.56 of the $2.14 increase.
This conversion problem has been exacerbated by a shortage in global refining capacity, with around 5 million barrels per day offline due to various reasons such as damage from Iranian strikes and Ukrainian drones, voluntary shutdowns, and seasonal maintenance.