Average national diesel prices, as of May 6, hit $3.17 cents per gallon, according to the U.S. Energy Information Administration (EIA). This is equal to prices from a year ago but up about 2 cents from the week before, with California experiencing the highest average diesel prices at $4.09 per gallon.
While we've come a long way from the just over $1 per gallon in the mid 1990s, we thankfully haven't hit the almost $5 per gallon highs of mid-2008 and over $4 averages between 2011 and 2014 in a few years.
Wonder why diesel prices are now higher than regular-grade gasoline on a dollar per gallon basis? Before September of 2004, according to the EIA, diesel prices were historically lower than gasoline prices except during cold winters. The EIA noted three reasons that diesel prices have been higher in recent years:
- Demand for diesel fuel and other distillate fuel oils has been relatively high, especially in Europe, China, India, and the United States.
- The transition to less polluting, lower-sulfur diesel fuels in the United States affected diesel fuel production and distribution costs.
- The federal excise tax for on-highway diesel fuel of 24.3 cents per gallon is 6 cents per gallon higher than the federal excise tax on gasoline.
Projections by the EIA are for diesel prices to level out in 2019, possibly drop from $3.18 average in 2018 to $3.08 average in 2019 with an rise expected again in 2020.