May, 26 2022
The Ukraine war is among the reasons why diesel fuel prices have jumped 56% to $5.60 a gallon from $3.60 a gallon in January and are rising faster as inventories of diesel -- the primary fuel for all forms of shipping -- have plummeted, the Houston Chronicle reports.
While gasoline stockpiles are 8% below the seasonal norm -- and gas prices have jumped up by about 36% -- diesel reserves are about 22% below normal as demand soars and refineries can't produce enough to keep up. Crude oil supplies have risen as production increases and the federal government taps the Strategic Petroleum Reserve, but there aren't enough refineries left to turn it into fuel.
And refineries are operating at maximum to redress the loss of Russia's production, which comes atop the world's loss of 3 million barrels per day of refining capacity, including the US' 1m per day, to the pandemic.
With the Ukraine war continuing and little chances of more refining capacity emerging, prices won't abate any time soon, said Patrick De Haan, head of petroleum analysis for fuel tracking firm GasBuddy.
"I don’t think anyone could cheerlead for an economic downturn to bring down prices," he said, "but that would do it."
Source: Undercurrent News