Diesel Fuel Prices Reach New Highs and Potential Shortage Looms

Nate Bruce, Farm Business Management Specialist, nsbruce@udel.edu

United States fuel prices have reached new highs for the second time in recent months. The cost of diesel has risen exponentially in the past year. Last year at this time, the national average for a gallon of diesel was $3.12. Today, the national average price of diesel gas is $5.54 per gallon, which increased by $0.22 just from last week. In just one year, the price of diesel has increased by 78%. In Delmarva, diesel is running around $6.00 per gallon, higher than the national average. Offroad diesel (dyed) is running at about $5.64 per gallon. It is difficult to believe that at one point, retail diesel was viewed as a cheaper alternative to gasoline. The last time diesel prices were lower than gasoline prices was in 2004.

Why has the price of diesel risen? There are a lot of factors but Ukraine / Russia, limited refining capacity on the East Coast, and post-pandemic supply chain issues all have contributed to the rising price per gallon for diesel. In some areas on the East Coast, it has even been reported that offroad diesel has been more expensive than on-road diesel. This typically is not the case. This has not been seen yet in Delmarva as regional producers are fortunate to be near refineries located in the Baltimore area. Getting diesel fuel may become one of the next issues producers face this season. This will be something to watch in the coming months.

Below are retail diesel prices from 2000 to now:

Milk price per gallon increasing and decreasing throughout the years with a sharp uptick in 2022.