Price of Diesel is at a Record High

While numerous macroeconomic and geopolitical factors impact the retail price of diesel fuel, state environmental policies also get wrapped up into the price at the pump. Nationally, the average price of diesel is $6.51 a gallon – a record high. High diesel prices impact the bottom line for propane marketers and transporters, whose trucks rely on the fuel to acquire and deliver product to consumers.

Across the country, states have been considering legislation to create a Clean Fuel Standard (CFS) – another name for a Low-Carbon Fuel Standard – that requires a gradual reduction in the carbon intensity of transportation fuels. Under this program, diesel fuel generates programmatic deficits that are akin to a financial penalty. As such, this added regulatory cost is included in the price paid by consumers. According to AAA, California, Oregon and Washington State currently have the three highest diesel prices in the continuous U.S. California is $8.42 per gallon, Oregon is $6.86, and Washington State is $7.43 a gallon. And all three of these states have established CFS programs in place. 

Notably, other states are following suit. New Mexico’s Clean Transportation Standard went into effect earlier this year, and Hawaii passed legislation to establish its own program in July. Further, numerous states, including Illinois, Michigan, Minnesota, New Jersey, New York, and Pennsylvania have all introduced bills this session to create their program to reduce the carbon intensity of transportation fuels.

For more information, contact NPGA’s Senior Director of State Advocacy & Affairs, Jacob Peterson.