Why Are Iowans Seeing Such High Diesel Prices?
As gas prices continue to soar nationwide, people are getting more and more frustrated as they fill their tanks. Truck drivers and companies are getting the hardest blow as diesel prices in Iowa average $5.29—which is almost $2 more than it was a year ago!
According to Patrick DeHaan with GasBuddy, diesel inventories are at the lowest they have been in decades and the demand for it is high globally.
It’s the fuel of much of the U.S. economy, semi-trucks, trains, a lot of construction equipment, and diesel inventories have been falling, not only that because of the EU’s stance on Russian oil already, we’ve seen shortages of diesel in Europe with much or some of the product has been moving easterly to the European Union, and that has kept prices for diesel very high in the U.S. as we continue to see that imbalance persist. I do not expect any improvement in diesel prices.”
The Northeast is seeing the worst of this. They are currently recording their lowest seasonal diesel inventory on record.
According to Freight Waves, the East Coast usually stores 62 million barrels of diesel during May, but this year that number is closer to 52 million barrels.
So, why is the diesel supply so low?
Just like gas prices, diesel prices are impacted by sanctions that have been placed on Russia and raising post-pandemic demands.
According to AgWeb, there are even some farmers claiming that farm diesel prices are higher than on-road diesel—which is typically not the case.
In the Northeast, one of the problems also lies in refining capacity shortages. Peter Meyer with S&P Global Commodity Insights adds;
East Coast capacity has been cut in half from 1.6 million barrels per day to 800,000 barrels per day over the past 10 years as half of the refineries in the east have shuttered.
Diesel in California is the most expensive with the average being $6.518 and New York is second with the price of $6.472.