Diesel crack spread tops $100 a barrel as refining crunch pushes pump prices past $5.60
On-road diesel is in the high $5.60s this week, and crude is not the reason. Crude has been in the $80s. The squeeze is at the refinery, where the diesel crack spread, the margin between crude and the finished fuel, is above $100 a barrel. Its usual range is $15 to $25.
For carriers and the jobbers who fuel them, the refinery margin is setting the price right now. Aaron Decker at FreightWaves put it plainly in a FreightWaves Today interview: this is a refining capacity problem, not a crude problem. Outages, thin distillate inventories, and the Russia-Ukraine war still pulling barrels out of the market are doing the work.
What haulers pay
The US diesel average is $5.62 a gallon, up 53% from a year ago. That number sets fuel surcharges, and a 53% jump means the surcharge line on every freight invoice is doing heavy lifting this quarter. Carriers running the old base rates are eating the gap until contracts reset.
Maine runs above the average. Diesel there is $5.65, against $3.88 a year ago, more than a dollar higher. A local hauler or a school district there pays that price at the pump, not the national blend.
Inventories
The EIA's weekly data this morning shows distillate stocks down again. RBN notes this is the lowest inventory the country has held in the month of August since 1951. Low stocks give refiners no cushion, and every outage prices straight through to diesel. RBN's own read is that 2026 is the first year diesel cracks have topped $100, past even the 2022 boom.
The back-to-school bill
The pain is landing on diesel fleets outside freight too. Biddeford, Maine runs more than 20 school buses and moves 1,500 to 1,800 students a day, all on diesel. Superintendent Jeremy Ray says the district budgeted about $17,000 extra for fuel this year. It is a small number against a national freight bill, but it is the same $100 crack showing up in a municipal budget, and it tells jobbers who serves what accounts where the next round of pricing calls goes.
What to watch
Whether refiners can lift distillate runs before heating-oil demand competes for the same barrels this fall. If they can't, the crack could hold or widen even with crude flat. Watch next week's WPSR for a distillate build; without one, surcharges stay high. And watch how the Russia-Ukraine supply drag moves, since that is pulling barrels that would otherwise ease US distillate balances.
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Fixed the one flagged line. `on track for their lowest end-of-month level since April 2005` was a month-end projection the weekly release doesn't establish, so I cut the forecast framing and stated what the data shows. The RBN-attributed August-1951 low stays, and every other fact is untouched.