The nation’s average gas price has declined for six consecutive weeks and diesel declines are outpacing it. The national average diesel price of $4.71 is 12 cents less than a week ago and 58 cents less than a month ago, according to AAA data.
The average Ohio diesel price was $5.07, down 22 cents from a week ago and 79 cents from a month ago, according to the data.
In Dayton, Springfield and Cincinnati, the price of diesel fuel on average, was down 24 cents, 18 cents and 17 cents, respectively, compared to the week before and down 79 cents, 85 cents and 54 cents compared to a month ago.
“There’s a lot of room to go down” for diesel, which struggled with supply issues more recently than gasoline, said Patrick De Haan, senior petroleum analyst for GasBuddy, which tracks fuel prices.
“Gasoline consumption has continued to decline, and so gasoline has had this party for the last (six) weeks, whereas diesel only recently has started to really see a turnaround in inventories that were extremely tight in mid-October,” De Haan said. “Diesel’s heyday is just getting going. Gasoline’s party is just about done.”
Diesel’s struggle stems from several areas, De Haan said, including Russia’s war on Ukraine, which is having more effect on diesel than gasoline because Russia produces “a lot of diesel and a lot of heavy oil.”
Diesel has a long way to go now in terms of potential price declines because of some of the recent improvements in supply, he said. In mid-October, the United States had 25 days of diesel supply left. As of Thursday, it had 32 days, De Haan said.
“So we’ve seen diesel supply rise seven days in two months. That’s pretty substantial,” he said. “In fact, diesel supplies now are 3.4 days higher than they were a year ago, which is excellent news.”
The United States also has added about six days of supply in a little more than a month, De Haan said.
“That’s quite rare to see such a rebound and that’s why diesel is just starting to see bigger to declines is because the build and supply has been very recent,” he said.
Diesel, which hit a record-high $5.88 in early June, could still decline another 50 cents to $1 a gallon over the next three to five weeks and maybe beyond, De Haan said.
“As inventories have dramatically increased, prices have dramatically decreased and now it’s on stations to pass it along,” he said. “So it’s really (a question of) how quick stations will go down. Some stations may go a lot faster and others.”
In Dayton, more than a dozen stations were selling diesel for less than $5 a gallon on Thursday afternoon, with two stations in Huber Heights and Tipp City dropping their price to $4.19 a gallon, according to GasBuddy. In Clark County’s Springfield, as well as Butler County, at least 10 stations sold diesel for less than $5.
Much of the possibility of further decline in diesel prices is contingent on retailers, who have “taken it on the chin this year,” De Haan said.
“When prices go down, they’re stuck with more expensive inventory, so they don’t really want to lower prices as quickly,” he said. “(With) diesel, they don’t sell as much as generally, so they’re stuck with inventory that they paid a much higher price for and that’s going to affect how quickly they want to lower their price.”
Pitfalls that could slow or reverse a diesel decline include the type of winter weather that leads to a sharp increase in heating oil consumption, De Haan said.
“Heating oil is the same as diesel,” he said. “If it starts getting really cold, as it’s supposed to, a lot of people in the northeast and in rural areas that use heating oil are going to be heating their homes and so that could eventually cause higher demand, which could cause supplies to drop.”
Any worsening in Russia’s war with Ukraine also could cause diesel prices to rise, De Haan said.
“It’s all about supply and demand and anything that can touch on diesel supply or diesel demand,” he said.
Another factor to keep in mind is that BP-Husky Toledo Refinery in Toledo is still down following a Sept. 21 fire that killed two people, De Haan said.
“That’s a major diesel producer for Northwest Ohio, so (Ohio) may not see the diesel party as much as others because (it’s) having to bring in diesel from outside the area to make ends meet in some cases,” he said. “Sometimes that fuel is more expensive. If it’s coming longer distances, there’s pipeline tariffs, but that could make (Ohio) a bit more susceptible. If anything does happen that could kind of enhance the effect.”
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