We end the week with diesel hitting another all-time record high. ProMiles reports Friday’s national average price is $4.47 a gallon – up 2 cents from Thursday, May 15, and up 12 cents from a week ago.
Eighteen states are now showing an average of $4.50 a gallon or more, with New York leading the pack at $4.76 a gallon, within 24 cents of becoming the first state to hit $5 a gallon. At the current price a 200-gallon fill-up costs $952.
Oil is also at a record high, trading above $127 Friday morning.
Refiners focus on diesel
Just when U.S. refiners would normally be ramping up to distill more gasoline for the summer driving season, they’re ramping up to produce more diesel instead.
The Wall Street Journal reported that’s because they can make more money from diesel, which is selling for 75 cents to $1 per gallon more than gas.
Meanwhile, Bloomberg reported China is significantly increasing its purchases of diesel, which is expected to drive prices even higher here in the U.S.
OPEC, refiners restrict fuel
The investment firm Goldman Sachs has raised its forecast, predicting that oil will hit $141 a barrel later this year.
The New York Times reported this week that both OPEC and American refiners could ease fuel prices by producing more, but neither are doing so.
Saudi Arabia is producing at 2 million barrels a day below capacity. In response to rising costs and less consumption, U.S. refiners were operating at 81 percent of capacity in mid-April – compared with 90 percent a year earlier.
Judy Dugan, research director of Consumer Watchdog in California, told the Times that refiners have a captured market. In a truly competitive market, you might see some of these providers try to improve their market share by reducing prices, she said
Diesel costs hit families harder than gas costs
“Gasoline prices alone are making drivers cry ‘uncle,’ but diesel costs may be an even larger hit on family budgets,” said Dugan in a Consumer Watchdog press release.
“Farmers are having to pass through diesel and petroleum-based fertilizer costs, while truckers and shippers face a choice between bankruptcy and passing along the cost of their $600 fill-ups,” she said. “It’s a no-win for everyone except energy traders and oil companies.”
– Staff Editor Elizabeth Andersen and Staff Writer Reed Black compiled this report.