Gas and diesel prices are top of mind for farmers, too.
According to the American Farm Bureau Federation, it is not just one factor.
The price difference between diesel and gas has many scratching their heads. On October 31st, the average diesel price was $5.32/gallon, while the average gas price was $3.86. American Farm Bureau Federation Senior Economist, Veronica Nigh sums it up as an issue of supply and demand.
“On the supply side, back in March, the U.S. banned imports of Russian oil and Russian petroleum products. While we only get three percent of our oil from Russia, we get 20 percent of our petroleum products from that country. A lot of those petroleum products that we were importing are used to make diesel fuel. We’ve also seen some downturn in production as refiners have been taking their plants down for maintenance,” said Nigh.
Nigh says the fall season brings high demand for diesel fuel as tractors, trains, and boats work to gather and transport harvest.
“Gasoline tends to peak in the summertime when Americans are out hitting the open road on vacation, whereas diesel demand tends to increase in the fall and winter with increased trucking as retailers are stocking their shelves for the holidays. Of course, farmers are using more diesel during harvest, and as folks are using a lot more heating oil as the temperatures drop. So, it’s a combined supply and demand issue really going on here with diesel that is separating it from gasoline prices,” Nigh said.
There are also regional factors that can influence the cost of diesel fuel.
“Nationwide, we’re down about 17 percent relative to the same time last year, but on the East Coast, they’re down 37 percent, the Midwest is down 15 percent, the West Coast and Rocky Mountain regions are down 11 percent and nine percent, respectively. Certainly feeling a pinch in multiple regions across the United States, but the East Coast so far is having the biggest supply constraint, followed by the Midwest,” said Nigh.
Some of the most expensive states for fuel in the U.S. are California, Hawaii, Nevada, Oregon and Washington.
Diesel prices across the United States are currently averaging around $5.34 per gallon.
