Diesel prices have leveled off at about $2.40 in recent weeks, though some pumps have posted prices far higher.
The national average retail price of a gallon of diesel dropped to $2.392 this past week, following three consecutive weeks of record highs.
At 11 truck stops, the mid-summer pump price surpassed $3, says Chris Lee, marketing director of ProMiles fuel-tracking software. “That is a shocking number,” Lee says. “We were concerned when it went over $2. Seeing it push over the $3 mark is something that the industry never really considered.”
Moreover, the traditional summertime escalation of the price of gasoline over the price of diesel – thanks to heavy gasoline demand by vacationers and negligible demand for heating oil – has not happened this year. Many analysts believed it was unlikely to happen at all, partially because of the increasing demand for diesel in the new industrial behemoth, China.
“It boils down to supply and demand,” says Denton Cinquegrana, market editor for the Oil Price Information Center. “The demand for diesel fuel has been much better than in years past. There has been a 3 to 4 percent demand growth increase in diesel, and gasoline is a tad under 2 percent.”
Rising diesel prices have many causes, but turmoil in Iraq and Afghanistan is not one of them, Cinquegrana says.
“The war isn’t having an effect on it,” Cinquegrana says. “The demand for diesel is strong around the world. Where the U.S. uses mostly gasoline, most other countries use diesel.”
That demand could sharpen if hurricanes continue to tear through the Gulf of Mexico, the site of many oil production facilities. “I think we are seeing a temporary spike due to the hurricanes,” Lee says.