Diesel enjoys new price lows not seen since 2005.
The U.S. Energy Information Administration (EIA) on Feb. 17, noted that for the first time since Feb. 14, 2005, the average U.S. retail price for on-highway diesel fuel had fallen below $2 per gallon. The price currently sits at $1.98 per gallon. The last time the U.S. average for diesel had hit $2 (but not dipped below it) was early 2009.
EIA pointed out that falling diesel prices are due to a combination of falling crude oil prices along with an uptick in the inventories of crude oil and refined products worldwide.
Diesel prices are following in the footsteps of regular gasoline prices, which moved below the $2 per gallon point more than a month ago.
EIA noted that in recent years, diesel prices have been higher than gasoline prices. This is attributed to the strong global demand for diesel, federal fuel taxes for diesel, which are six cents per gallon higher than those for gasoline, and the higher production cost of ultra-low sulfur diesel.
EIA forecasted that diesel prices should remain relatively low throughout 2016 and 2017, averaging $2.22 per gallon and 2.58 per gallon, respectively.