The cost of gasoline and diesel fuel has been exponentially high for quite some time. Due to many shortages, high demand, and a wobbly economy, the price has constantly fluctuated, but today we see a change for the better. The price of diesel fuel has gone down by 3.4 cents, making it an average of $3.767. This price is the lowest we have recorded in over a year and a half since January 17, 2022.
On January 30th of this year, the price was reported at $4.622 per gallon.
The price point for diesel remained steadily high until about two weeks ago, meaning the decline of nearly a full dollar has happened in a very short time span. It is anticipated that the cost of diesel will go down even more in the coming weeks.
Diesel prices are primarily based on things known as the spot market. This determines the price for a specific city as it is based on the supply spot for the city. For example, the Gulf Coast spot market is the biggest determiner in the cost of Atlanta’s diesel, as the Atlanta diesel comes mostly from the Colonial Pipeline. This means the wholesale cost of Gulf Coast diesel determines the price for Atlanta diesel, but this may not be the same as California’s price of diesel as California comes from a different supply, and therefore has a different spot market as a base point.
Based on research from the agricultural company DTN, the spot market differential is decreasing. The differential is the term used to refer to the price difference between the national average sale cost and the spot market specific prices. The difference lately has been falling, which has translated into the cost of the diesel at the pumps.
Previously, the cost of diesel and gasoline was expected to sharply increase this summer.
Production has increased in the extraction of oil overseas which has helped keep the cost lower than expected. Economists are now reviewing their predictions and what they can anticipate the cost to be in the coming months. Some report expectations that the cost will stay low, but not drop much lower than it currently sits. Others expect that production to steadily decrease, leading to another shortage and ultimately leading to higher costs.
Either way, currently we sit in unpredictable and unprecedented times, in which it is exceedingly difficult to anticipate what lies ahead for costs of fuel.
