US Diesel Hits Record $6.529 in 11th Straight Weekly Rise
US on-highway diesel hit a record $6.529 per gallon, the 11th straight weekly increase, up 74% year-over-year. Refiner margins are at records while freight and CPI take the hit.
The national average US on-highway diesel price has climbed to a record $6.529 per gallon, the 11th straight weekly increase and a sharp problem for freight, food, and inflation prints heading into Q4.
The print
The average retail price of on-highway diesel spiked by 24 cents in the latest week, and by 88 cents in four weeks, to a record $6.529 a gallon at gas stations on Monday, and that’s for the US overall, according to the EIA this morning. Year-over-year, the price of diesel has spiked by 74%.
This week the West Coast (PADD 5) is highest at $7.456 per gallon and the Gulf Coast (PADD 3) is lowest at $6.177 — a gap of $1.28. California diesel prices spiked to $8.246 a gallon.
Why it is ripping
There is a shortage of diesel in the rest of the world, and US refiners provide much needed supply. Year-to-date through August, the US produced 5.1 million barrels per day of distillate fuel oil (mostly diesel); imported almost none; and exported a record average of 1.74 million barrels per day over the past two months.
Diesel crack spreads, which are a rough measure of US refinery profit margins for diesel, are at record levels. Republicans called for a diesel export ban. That is the political tail risk refiners now have to price in.
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The inflation angle
Diesel moves through freight and into shelf prices. The average retail price of gasoline, all grades combined, at gas stations on Monday spiked by another 16 cents from the prior week, by 39 cents in four weeks, and by $1.31 from a year ago, to $4.61 a gallon, nearly matching the May highs.
These price increases of gasoline will enter directly into the inflation calculations for all-items CPI and the all-items PCE price index for September, to be released in October. Jet fuel is running hot too — the spot price of jet fuel spiked by 34 cents over the past week, by 65 cents in four weeks, and by 115% from a year ago, to $4.418 per gallon.
Who gets squeezed first
Fishermen from Cape Cod to Alabama are cutting activity as fuel costs surge, while weak seafood demand limits their ability to recover costs through higher prices. Trucking is next in line — carriers with weak fuel-surcharge pass-through will see margin compression fast.
Higher diesel prices may also intensify stress on carrier margins, accelerate capacity exits, and shift market share toward fleets with better fuel efficiency and stronger cost control. Historically, fuel spikes have often coincided with waves of carrier failures, reinforcing why diesel price risk is a key watch item for U.S. shippers.
Options market and stocks to watch
A few names traders should keep on the radar as the diesel squeeze plays out:
XOM and CVX: integrated majors with refining exposure benefiting from record distillate crack spreads.
VLO and MPC: pure-play refiners most directly leveraged to diesel margins, but also most exposed if Washington moves on an export ban.
KNX and ODFL: trucking names to watch for fuel-surcharge lag and any commentary on freight demand as diesel bites. See more market news here.
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