The U.S. Energy Information Administration (EIA) has revised its diesel price forecasts for 2024 and 2025, projecting higher costs in its latest short-term energy outlook (STEO) released recently.
According to the March STEO, the EIA anticipates on-highway diesel fuel in the U.S. to average $4.01 per gallon in 2024 and $4.08 per gallon in 2025. These figures represent an increase compared to previous projections.
In the first quarter of 2024, the EIA estimates 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 $4.15 per gallon in the fourth quarter. Moving into 2025, prices are expected to continue rising, with projections of $4.18 per gallon in the first quarter, $4.08 per gallon in the second quarter, $4.03 per gallon in the third quarter, and $4.04 per gallon in the fourth quarter.
In its February STEO, the EIA had forecasted lower prices, with projections of $3.92 per gallon for 2024 and $3.89 per gallon for 2025.
Recent data from the EIA’s diesel fuel update, released on March 18, indicates that on March 4, the on-highway diesel fuel price was $4.022 per gallon, followed by $4.004 per gallon on March 11, and $4.028 per gallon on March 18. Notably, this represents a decrease of $0.157 compared to prices from a year ago.
Regional disparities are evident, with the West Coast registering the highest cost at $4.639 per gallon, while the Gulf Coast reflects the cheapest cost at $3.745 per gallon.
According to the AAA Gas Prices website, the average U.S. diesel price stands at $4.058 per gallon as of March 21, with slight fluctuations observed over recent periods.
Analyzing the breakdown of diesel prices, the EIA’s January update showed that 45 percent of the retail price in January went towards crude oil costs, 21 percent towards distribution and marketing, 19 percent towards refining, and 15 percent towards taxes. In comparison, gasoline prices in January allocated 57 percent towards crude oil costs, 17 percent towards taxes, 16 percent towards distribution and marketing, and 11 percent towards refining.
These fluctuations in fuel prices reflect broader economic trends and geopolitical factors impacting global energy markets.