EIA Raises USA Diesel Price Forecasts
The U.S. Energy Information Administration (EIA) has revised its forecasts for diesel prices in the short term, predicting higher prices for both 2024 and 2025. In its latest Short Term Energy Outlook (STEO) released recently, the EIA anticipates the average price of on-highway diesel fuel in the U.S. to be $4.01 per gallon in 2024 and $4.08 per gallon in 2025.
The report indicates a gradual increase in diesel prices over the forecast period. For the first quarter of 2024, the EIA expects diesel to average $3.97 per gallon, followed by $3.92 per gallon in the second quarter, $3.99 per gallon in the third quarter, and a peak of $4.15 per gallon in the fourth quarter. The forecast for 2025 projects a similar trend, with prices starting at $4.18 per gallon in the first quarter and gradually declining to $4.04 per gallon by the fourth quarter.
These projections mark an upward revision from the EIA’s previous estimates released in February, where it forecasted lower prices for both 2024 and 2025. The current diesel prices stand at $4.022 per gallon as of March 18, reflecting a decrease of $0.157 compared to the previous year.
Regional disparities in diesel prices are evident, with the West Coast experiencing the highest costs at $4.639 per gallon and the Gulf Coast enjoying the cheapest rates at $3.745 per gallon.
Comparing diesel pricing components, the EIA highlights that crude oil costs constitute the largest portion, accounting for 45% of the retail price, followed by distribution and marketing costs (21%), refining costs (19%), and taxes (15%).
In contrast, gasoline prices follow a different breakdown, with crude oil costs comprising 57% of the retail price, followed by taxes (17%), distribution and marketing costs (16%), and refining costs (11%).
The article provides insights into the factors influencing diesel prices, including global crude oil trends, distribution logistics, refining capacities, and taxation policies. It underscores the intricate dynamics shaping fuel prices and their implications for consumers and industries reliant on diesel. For further inquiries, readers are encouraged to contact the author, Andreas Exarheas, via email.
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