WASHINGTON, D.C. (RFD News) — Gasoline prices have moved higher over the last couple of weeks, prompting the EPA to take action it says will help keep fuel affordable.
Beginning September 1, the EPA will allow the sale of gasoline with a higher Reid vapor pressure, meaning the fuel is more volatile. In a typical year, higher-volatility gasoline does not go on sale until mid-September, when refiners roll out winter blends.
Gasoline is currently averaging around $4.10 a gallon. Officials hope allowing the fuel to be sold earlier will boost supplies and lower prices.
Global diesel inventories remain tight as the war with Iran continues. Dave Chatterton with Strategic Farm Marketing says they are watching the flow of oil.
“We’re having trouble, I guess, quantifying how much oil is actually coming out of the Strait of Hormuz or the Red Sea region - call it the Middle East, in general - and we’ve seen an adaptation by the UAE and in Saudi and some of the other oil producers to use what we call a dark fleet to get oil out. In other words, they turn their transponders off, they’re not officially recognized as ships that are navigating with oil, and they’re smaller ships typically that are pulling cargoes back out into the open sea, either past Oman or past Iran to the south, and then loading them onto larger ocean-going vessels.”
Chatterton says it could be a good idea to lock in fuel needs when opportunities come up.
“When we look at cash basis for ULSD or for farm diesel, cash basis is relatively normal or even a little bit weak for this time of year, and that tells us that, you know, right now it’s the futures market that’s doing the pulling, if you will. I suspect that that basis market can heat up as we get into a little bit more of a demand period and start to have a little bit bigger pull on the system.”
Diesel prices are also affecting livestock operators. EverAg Chief Economist Dr. Lee Schulz says producers need to focus on non-feed costs as well.
“Fuel prices being up 25-30 percent year-over-year. If you look back to April, May, and June time period, those are a lot of the factors that have been driving those costs higher, as opposed to what I’ll term as the commodity ingredient prices, which those have remained very close to cost of production. A lot of times, when you look at grain operations, it’s the inflationary costs that have really kind of increased that cost of production. I would have it about three percent higher here in 2026, and I would say another three percent increase in 2027.”
AAA shows the national average for diesel is around 30 cents below the all-time high recorded in June 2022.
