The weekly national average price for a gallon of diesel fell by a little over 10 cents in the past week reaching $5.021, according to the American Automobile Association (AAA). However, retail diesel prices remain high indicating a long road ahead for diesel prices to start stabilizing.
Diesel Price Down, but Remains High
The current average gallon of diesel fuel remains 50 cents lower than a month ago and close to $2 more 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 declining for the eighth consecutive week. The national average diesel prices compared to the price of gas have been slow towards stabilizing. Gas prices have currently reached below the $4 mark from an all-time high of $5.016 in June and 77 cents shy of the $ 3.184 price tag a year ago.
Ripple Effect Across Industries
Nationwide, the highest average price for diesel fuel was $6.232 in California while the lowest average was $4.523 in the state of Texas. Across the nation, 23 states saw a gallon of diesel at the pump go over the national average of $5.021. June 19th saw the highest diesel price across the nation with the average retail price for a gallon of diesel going $5.816.
Despite decreases in diesel prices in recent weeks California, Hawaii, Oregon, and Washington continue to see diesel prices go over the $5.50 threshold. Hawaii, California, and Nevada all saw modest dips in the price of diesel and gas prices. While Texas, Oklahoma, Kansas, Missouri, Louisiana, and Arkansas have all seen diesel prices going for less than $4.70.
High diesel prices affect us all in some way or the other as diesel fuels everything from trucking, and freight, to construction industries. When these industries pay more for their fuel, the cost is passed along to customers rippling through the economy, driving inflation and squeezing budgets and bottom lines.
Fuel Prices are Expected to Continue to Decline
According to the Consumer Price Index (CPI), the energy index fell by 4.6 % in July after rising 7.5 percent in June. The gasoline index fell 7.7 percent over the month following an 11.2-percent increase in June. Indications of a continued reduction of fuel prices are further strengthened with the Energy Information Administration (EIA) forecasting that average retail diesel prices in the third quarter of 2022 can go as low as $4.39 a gallon in the fourth quarter of this year.
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They’d better keep declining quickly, because prices are still crazy high. The run-up was so fast and extreme.