The average retail price for diesel fuel in the U.S. dropped below the $2 per gallon mark this week, according to data tracked by the Energy Information Administration (EIA); the first time since 2005 that diesel dipped beneath that price mark.
Diesel declined to a retail average of $1.98 per gallon this week; down 2.8 cents per gallon from last week and 88.5 cents per gallon cheaper compared to the same week in 2015.
EIA said this is the first time diesel dropped below $2 per gallon since February 14, 2005; though it came close in early 2009. The agency added that the diesel price decline is largely due to both decreasing crude oil prices and increasing inventories of crude oil and refined products worldwide.
That being said, three significant regional drops in diesel prices are behind the overall dip in the nation’s retail average:
- The Lower Atlantic’s 1.2 cent per gallon drop to $1.947 per gallon this week;
- The Rocky Mountain’s 4.8-cent decline to $1.866
- The Gulf Coast’s 3.8-cent drop to $1.858
Diesel prices remain above $2 per gallon in the remaining U.S. regions, with California hone to the highest regional price at $2.36 per gallon.
Gasoline prices also continued to fall this week, dropping 3.5 cents to $.724 per gallon, which is 55 cents cheaper compared to the same week in 2015, EIA’s data indicated.
The Midwest is the only region that witnessed a price uptick from last week; a 4/0th of a penny hike to $1.522 per gallon. The West Coast, with California’s prices included, is the only region where the cost of retail gasoline exceeded the $2 mark – in this case, $2.217 per gallon. With California’s prices removed, however, the West Coast retail average falls to $1.938 per gallon.
Prices for both diesel and gasoline are expected to remain on the low side for some time, at least according to EIA’s most recent Short-Term Energy Outlook (STEO).
That forecast predicts that the U.S. retail regular gasoline price will average $1.98 per gallon in 2016, which would be the lowest annual average since 2004, before rising to $2.21 per gallon gal in 2017.
Retail diesel fuel prices, which averaged $2.71 per gallon in 2015, are projected to average $2.22 per gallon in 2016 – 7 cents per gallon lower compared to the EIA’s last short-term projection – before climbing to $2.58 per gallon gal in 2017.