Higher U.S. diesel prices are raising costs for transport and industrial users as Energy Secretary Chris Wright weighs refinery restarts, following an International Energy Agency (IEA) agreement to speed up pledged emergency supply releases.
The U.S. Energy Information Administration (EIA) reported an average of $6.276 per gallon for on-highway diesel in its Oct. 19 reading, up 9.7 cents from the prior week. The Oct. 12 survey recorded $6.179 per gallon. EIA data showed refinery utilization at 93.5% of operable capacity for the week ending Oct. 9.
In Houston on Oct. 20, Wright said he was discussing whether closed U.S. refineries could restart, while cautioning that some talks might not lead to operations resuming. An April 20 White House determination under the Defense Production Act authorized the Energy secretary to use federal purchasing and financing tools to expand domestic petroleum production, refining and logistics capacity.
On Oct. 15, the IEA Governing Board agreed to accelerate the outstanding portion of its March emergency stock pledge. The plan includes a diesel allocation exceeding 20 million barrels, which the agency says should be released as soon as possible; it also urged members with refining capacity to increase supplies of refined products, particularly diesel.
In its Oct. 14 report, the IEA identified reduced Russian refinery output, lower Middle East exports and shrinking inventories as constraints on diesel availability. EconoTimes’ earlier report on diesel supply pressures covered the agency’s findings.
Trucking, agriculture and heavy industry depend on diesel, so higher prices can add to their fuel and operating bills. Earlier EconoTimes coverage attributed to Vakulenko the view that stronger diesel margins can improve refiners’ returns, while freight and agricultural businesses pay more for fuel.
The IEA Secretariat will track the stock releases and brief the Governing Board after an updated review focused on diesel. The EIA’s next weekly diesel price release is scheduled for Oct. 27.
