The Price Of Diesel Fuel Nears An All-Time Record, Screwing Truckers, Farmers, And You. Here’s Why Diesel Costs Rise Faster Than Gasoline

Much of the world depends on diesel power. The food in your refrigerator, your overnight packages from Amazon, and even your furniture have likely ridden in some sort of diesel-powered vehicle in their life. Trucking, farming, construction, and railroading keep the world turning, and they all require diesel. So does your diesel pickup truck or passenger car, if you have one. The price of diesel hit a nationwide average of $5.62 per gallon, and there’s a chance it could even break the all-time diesel price record of $5.82 per gallon, set in May 2022. This hurts everyone from truckers and farmers to you. Here’s why it’s happening, and why the price of diesel soars higher than gasoline in times like these.

On Tuesday, the American Automobile Association (AAA) reported some dismal news. Regular gasoline is at a nationwide average of $4.10 per gallon, while diesel is averaging $5.62 per gallon after months of creeping higher in price. A year ago, diesel fuel was an average of just $3.70 per gallon, or only 52 cents more expensive per gallon than regular gasoline at the time.

On the surface, the cost of diesel might not matter much to car owners. Their cars are largely fueled by gasoline or electricity, so what the green part of the gas station sign says does not matter to them. But it matters a whole lot to the businesses, truckers, and farmers who now each have to spend tens of thousands of dollars more on fuel. A price that can be passed down to you as a consumer.

But why is this happening? Why is diesel so crazy expensive and, perhaps to answer a curiosity that car drivers have, why is the price of gasoline not as crazy at the moment?

War, War Never Changes

The simple answer to the question of higher fuel prices, be it gasoline, diesel, or even the 100LL that’s burned in my trainer Cessna, is that it’s one of the consequences of war. The ongoing war that started after Russia invaded Ukraine in 2022 is partly responsible for higher prices. Only adding fuel to the fire is Israel’s and America’s campaign against Iran. The New York Times explains the mechanisms at work here:

To understand why diesel prices are rising, it’s important to understand the big picture. There is simply not enough diesel available to meet the world’s needs.

Refineries produce diesel, gasoline, jet fuel, and other fuels by “cracking,” or heating, crude oil. The United States and China have most of the world’s refining capacity, followed by countries like Russia and India. But Russia’s ability to make diesel has been severely hamstrung because Ukraine has damaged many of its refineries. In July, Bank of America analysts said Russian refineries were processing around 3.9 million barrels per day, down from 5.3 million barrels a year ago. That has forced Russia to suspend diesel exports. “We estimate that now 40 percent of Russian refining capacity has been impacted by drone strikes,” said Debnil Chowdhury, who tracks the refining business for S&P Global. “And the reason that that’s important is it’s a global market.”

The effective closure of the Strait of Hormuz, the narrow waterway through which about a fifth of the world’s crude oil is shipped, has also limited the flow of crude oil, diesel and other petroleum products. As a result, the global oil price has climbed around 20 percent, to about $86 a barrel. The volume of crude oil refined in the Middle East has dropped to about eight million barrels a day in 2026, down 1.6 million barrels a day from 2025 levels, S&P Global analysts said in an Aug. 1 report. U.S. refineries have made up for some of that shortfall by operating at around 97 percent of their capacity, according to the Energy Information Administration. Exports of diesel and related fuels are up by around 28 percent compared with last year and U.S. inventories of those fuels have fallen sharply.

The New York Times further notes that fuel refineries are making a killing right now. When oil trades at $70 a barrel, the New York Times reports, refineries make $20 to $30. But in a crisis like right now, refineries are making closer to $90. As a result, the profit margins at producers like Valero Energy and Marathon Petroleum have doubled. In other words, if you’re the one providing the gas and have gas to sell, money is practically raining down from the sky right now.

It’s the opposite for the businesses, farmers, truckers, and drivers who are on the receiving end of the higher prices. The New York Times talked about Randy Madden, a farmer who delayed buying diesel for his 3,000-acre farm in Iowa when prices spiked in April. Unfortunately, the continued rise in pricing means that he’s expecting to spend over $40,000 on diesel this harvest season, or nearly double what he normally pays.

Some farmers can’t just take a hit like that. Farmers take out loans each year to cover their operating expenses. Many farmers didn’t budget for having to pay twice as much for fuel in the budgets they used to get their loans. The farmers that don’t have the liquidity to cover the higher cost of diesel may go out of business.

Then there’s the trucking industry. A single semi-tractor may easily burn more than 14,000 gallons of fuel per year, and according to the American Trucking Associations, the industry as a whole burns some 36.5 billion gallons of diesel per year. The math here is staggering.

Remember how I said that diesel averaged about $3.70 per gallon last year? A truck that burns 14,000 gallons of diesel at that price will cost $51,800 in just diesel fuel alone. At the current national average of $5.62 per gallon, that’s now $78,680 in diesel fuel alone. The price even hurts on a per-tank basis. A trucker topping up a pair of 100-gallon tanks now has to pay, on average, $388 more per fill-up.

To make matters worse, there isn’t a lot of relief in sight in the short term. According to the Energy Information Administration, the last refinery in America was built in 1977, and it takes years and billions of dollars to build new ones. China is limiting its fuel exports to make sure it has enough fuel for its own use. Other fuel producers in the world are ramping up their exports, but prices are still climbing anyway. Meanwhile, only single-digit numbers of ships continue to pass through the Strait of Hormuz per day, when it used to handle around 100 vessels per day.

If not much changes, the fear is that the price of diesel will exceed the all-time record of $5.82 per gallon. Now, technically, if you account for inflation, that $5.82 per gallon in 2022 would be worth $6.65 per gallon in 2026. So, if diesel does break the record, it will be largely on paper. Still, such a technicality is meaningless for the people paying tens of thousands more for fuel.

It’s not just truckers and farmers, either. A lot of people own heavy-duty pickup trucks that burn diesel. RV owners have motorhomes that burn diesel. Then there are the handful of holdouts still driving their diesel Volkswagens, Chevrolets, BMWs, and more. My wife and I both felt the crunch this summer as we continue to drive diesel vehicles.

The ripple effect is more than just higher prices for fuel. It now costs more to transport goods, more to produce food, and more to build things. That cost can be passed down to you in the grocery aisle and more. Remember, trucks move around 70 percent of the freight in America, and nearly all of them burn diesel.

Why The Price Of Diesel Rises Faster Than Gasoline

Alright, so, the big question. You know why diesel costs more. But why is diesel soaring so high compared to gasoline? Robert Rapier, a career chemical engineer writing for OilPrice.com, explains why diesel is hit worse by the same wars:

Diesel Starts With a Tighter Supply Cushion
One of the most overlooked realities is that diesel usually has less margin for error. Inventories of distillate fuels—which include diesel and heating oil—tend to run tighter than gasoline stocks. In both early 2022 and more recent market disruptions, distillate inventories were already below typical seasonal levels before the geopolitical shock hit. That leaves little buffer when supply is disrupted. Gasoline, by contrast, benefits from more storage, more localized production, and clearer seasonal demand patterns. Diesel doesn’t have that luxury. When supply tightens, it is usually diesel that feels it first—and fastest.

Diesel Is a Global Fuel; Gasoline Is Not
Gasoline is primarily a regional product. It is refined and consumed largely within the same geographic market. Diesel is different. It is the fuel of global commerce. It powers ships, trucks, trains, and heavy equipment that move goods across borders. As a result, diesel prices are tightly linked to global trade flows. When a critical chokepoint like the Strait of Hormuz is disrupted, the impact ripples through diesel markets worldwide. Even countries that import little crude from the Middle East still feel the effects, because diesel is widely traded and priced in global markets. A disruption anywhere can tighten supply everywhere.

Rapier further notes that the demand for diesel is not flexible, unlike gasoline. When the price of gas gets high, car owners reduce their mileage and demand falls. Some people don’t burn gas at all as they own EVs. The same cannot be said for the consumers of diesel. The trucks, trains, ships, tractors, and construction equipment still have to do the same jobs they’ve always done, regardless of the cost of fuel.

Rapier continues:

Refineries Can’t Just “Make More Diesel.”
In theory, higher prices should encourage more production. In practice, refining doesn’t work that way—at least not quickly. Diesel and gasoline come from different portions of the crude oil barrel, and shifting output isn’t simple. Diesel production depends on factors like crude quality, hydroprocessing capacity, and stringent ultra-low sulfur requirements.

Refineries are also often running near capacity, especially during periods of strong demand. Seasonal maintenance schedules can further limit flexibility. In the U.S., refiners are currently ramping up gasoline production ahead of the high-demand summer driving season. They can’t substantially shift production to diesel. The result is that when diesel demand surges or supply is disrupted, refiners can’t rapidly increase output to stabilize the market. That rigidity amplifies price spikes.

The short version, Rapier says, is that diesel prices rise faster than gasoline because the market for diesel is “structurally tighter, more globally integrated, and less flexible. It is the fuel that powers freight, industry, and agriculture. It operates with thinner inventories, faces more inelastic demand, and cannot be easily ramped up when supply is disrupted. Gasoline is a consumer fuel. Diesel is an economic fuel.”

There you have it, that’s why diesel is so expensive right now and why it’s so much more expensive than gasoline. Conflicts around the globe are hitting the gas pump, and the market for diesel is different than the one for gasoline. Either way, this gas crunch is something we’re all feeling right now, and the worst may be yet to come. Hopefully, that’s not the case. It doesn’t have to be the case.

If you’re a diesel user, how are you handling the rise in prices? Do you see an end in sight?

Top graphic image: Peterbilt