Rising crude oil prices and lingering winter weather in the Northeast have nudged up diesel prices. The national average price for a gallon of diesel jumped 5 cents to average $2.244 per gallon last week, according to the Energy Information Administration (EIA). This marks the highest diesel prices recorded since EIA began its survey in 1994.
California pump prices took the largest hit, as prices leapt 6.4 cents to average $2.482. On that increase, California retakes the dubious honor of being the most expensive region in which to fill up for diesel. All regions posted price hikes but diesel prices along the West Coast held the steadiest, rising only 2.9 cents to average $2.471.
However, in the most recent survey conducted by the American Automobile Assn. (AAA), in Washington State diesel prices averaged $2.679. This marks a slow but steady decline in prices off the $2.716 peak recorded on March 11.
The relatively steady prices on the West Coast reflect a surge of imports supplying the region. Diesel was in very tight supply after refinery outages and a new environmental diesel lubricity standard was implemented in Washington in early February, which resulted in price soaring up by even 30 cents in one week last month.
Neil Gamson, EIA economist told Fleet Owner that demand for petroleum distillates, which both diesel and heating oil are derived from, should ease to bring more stability to pump prices as heating oil use drops off. However, with unpredictable spikes in crude oil futures, which had today traded for just over $55 per barrel on the New York Mercantile Exchange, diesel will likely hover around the record high levels posted last week for some time.
“Some of the recent bumps in diesel prices are because of the recent cold weather in Europe,” Gamson said, noting that heating oil prices are still high. “Diesel prices are likely to stay fairly elevated and probably ease once winter weather passes.”
However, EIA expects that the rapidly growing world demand for petroleum will keep diesel above the $2-level throughout the remainder of 2005.