Price of diesel

In 2025, diesel prices declined, contracting 2.4% year-over-year to reach $3.67 per gallon. This reduction was attributed to increased oil production enabled by relaxed regulatory measures in the US. The Trump Administration's policy changes facilitated higher levels of energy production, effectively scaling back costs associated with diesel. However, these price reductions were tempered by several factors. The Environmental Protection Agency (EPA) raised blending requirements, which required diesel manufacturers to incorporate sustainable diesel fuel into their supplies. This mandate prompted cost increases because of the elevated costs associated with incorporating sustainable fuel types. Complications in refinery operations also played a role, with certain refineries expected to shutter production within the year, introducing complexities in how increased production could directly translate to lower diesel prices. Such operational issues raised the risk of price constraints by limiting the production scale that could be achieved, adding uncertainty to the overall cost reduction trajectory of diesel.

Between 2020 and 2025, the diesel market was shaped by a series of complex and significant events. The onset of the COVID-19 pandemic in 2020 led to drastic reductions in demand for diesel, as economies worldwide experienced lockdowns and a substantial drop in commercial and industrial activity. This resulted in a marked drop in diesel prices because of lower consumption levels across sectors reliant on this fuel. However, as vaccinations against COVID-19 were widely administered and governments began to lift lockdown measures, a recovery ensued in 2021. This led to a swift rebound in economic activities and a surge in diesel prices by 28.1% as industries resumed operations. The geopolitical landscape further complicated the market in 2022. Russia's invasion of Ukraine initiated significant geopolitical tensions, leading to the US and European Union imposing sanctions on Russian oil products, which pushed domestic diesel prices higher by 51.8% within the year. During this period, the US diesel industry also began to see the effects of increased energy production and the expansion of refining capacities, bolstered by supportive governance from the Biden Administration. However, these efforts to stabilize the market were somewhat countered by the Environmental Protection Agency's (EPA) mandates requiring the blending of sustainable fuels into the diesel supply, which introduced additional costs. Despite these countering pressures, the collective influence of these events led to a CAGR of 7.5% for diesel prices from 2020 through 2025, demonstrating the market's resilience amid fluctuating external factors.