The weekly national average price of a gallon of diesel fell a little more than 10 cents in the last week to $5,021, according to the American Automobile Association (AAA). However, retail diesel prices remain high, indicating a long way to go before diesel prices start to stabilize.
Diesel price falls, but remains high
Today’s average gallon of diesel fuel is still 50 cents lower than a month ago and about $2 higher than this time last year, which was $3,297.
Despite the high price of diesel fuel at the pump, the diesel futures market is showing signs of strength with retail diesel prices falling for the eighth week in a row. National average diesel prices compared to the price of gas have been slow to stabilize. Gasoline prices have currently come in below the $4 mark from an all-time high of $5,016 in June and 77 cents below the price of $3,184 a year ago.
Ripple effect across industries
Nationally, the highest average price for diesel fuel was $6,232 in California, while the lowest average price was $4,523 in the state of Texas. Nationwide, 23 states saw a gallon of diesel at the pump exceed the national average of $5,021. The highest diesel price in the entire country was recorded on June 19, with an average retail price of a gallon of diesel of $5,816.
Despite declines in diesel prices in recent weeks, California, Hawaii, Oregon and Washington continue to see diesel prices breach the $5.50 threshold. Hawaii, California and Nevada saw modest declines in the price of diesel and gasoline. While Texas, Oklahoma, Kansas, Missouri, Louisiana and Arkansas have seen diesel prices below $4.70.
High diesel prices affect us all in one way or another, as diesel fuels everything from road transport and freight to construction industries. When these industries pay more for their fuel, the cost is passed on to customers, hurting the economy, driving inflation and lowering budgets and bottom lines.
Fuel prices are expected to continue falling
According to the Consumer Price Index (CPI), the energy index fell 4.6% in July after rising 7.5% in June. The gasoline index fell 7.7 percent for the month after rising 11.2 percent in June. Indications of a continued decline in fuel prices are further strengthened by the Energy Information Administration (EIA) forecast that average retail diesel prices in the third quarter of 2022 may drop as low as $4.39 per gallon in the fourth quarter of this year.
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