What goes into diesel prices?

Diesel prices have hit a record high, averaging $6.29 per gallon as of September 14, according to federal energy data. Adjusted for inflation, that's the highest price since 2022, and the highest ever in raw dollar terms since this data series started in 1994. The increase comes from a mix of high crude oil prices and wide refining margins, meaning refiners are charging more to turn crude into diesel because supplies of diesel are tight worldwide.

That tightness traces back to reduced refining activity in Russia, China, and the Middle East, which has pushed other countries to buy more diesel from the United States. U.S. refineries are running nearly flat out, at 97% of capacity, and producing more diesel than they have since 2019, but exports have stayed high enough that domestic inventories haven't built up the way they normally do over summer. As of mid-September, U.S. diesel stockpiles sat 13% below their five-year average. Government forecasters expect global diesel production to stay below last year's levels in the coming months, which means tight supplies and elevated prices are likely to continue.

For homeowners, diesel prices mainly matter indirectly, through freight costs that ripple into the price of goods, and directly if you're in the Northeast, where diesel-type fuel oil is a common home heating fuel. If your home heats with oil, this trend is worth watching as the colder months approach.