Off-Road Diesel Climbs Above $5.00 per Gallon

U.S. diesel prices continue to shock the wallets of farmers and ranchers, who are now paying more than $5.00/gallon for off-road diesel. The trucking industry is now paying an average diesel price of $5.77/gallon, a steep rise from last year’s $3.21. While inflation hits consumers everywhere, diesel users are particularly impacted. But what’s causing the diesel hike? Record-high costs are less to do with Russia and more to do with U.S. refining capacity.

Diesel prices were already climbing higher before Russia invaded Ukraine. U.S. refineries have about 1.2 million barrels per day less capacity due to pandemic-related shutdowns, hurricane Ida damage and convergence to biofuels facilities. The continued push for electric vehicles has some investors wary of investments in increased refining capacity. However, the Biden administration has discussed tapping into diesel reserves to ease supply concerns — however short-lived the relief would be.

Read more on U.S. diesel prices and availability here.