Why are diesel prices above $5 a gallon?

UNITED STATES – Diesel prices in Minnesota average $5.29 a gallon and North Dakota averages $5.34 per gallon according to AAA.

It’s not quite the record of $5.62 a gallon North Dakota saw in June, but it’s still pretty high.

“We have seen it pop up here in the past month or so. We are up over 50 cents a gallon on diesel,” AAA Regional Director of Public Affairs Gene LaDoucer said.

LaDoucer says gas and diesel prices go up at different times every year. Gas prices rise before the summer driving season.

“Diesel tends to move higher in the fall with the fall harvest, with additional freight traffic leading up to the Christmas holiday and as well as home heating requirements, particularly in the Northeast,” LaDoucer said.

AAA says another problem is a thin inventory of diesel at a near 50 year low and high demand. LaDoucer says refineries are also concentrating on producing gas rather than diesel.

“It’s really hard to keep up with demand. Particularly since diesel is the fuel of choice in European countries,” LaDoucer said.

“So companies can make more money shipping it elsewhere?” Reporter Austin Erickson asked.

“Correct. Yeah, you know, the product goes to who’s willing to pay for that product,” LaDoucer said.

President Biden released 15 million barrels from the country’s strategic petroleum reserve to try to cut costs at the pump.

“We’re going to continue to stabilize markets and decrease the prices at a time when the actions of other countries have caused such volatility. I’ve told my team to be prepared to look further, look for further releases in the months ahead if needed,” Biden said.

One thing the president isn’t saying to his administration or oil companies is to drill for more oil.

“We want to be able to supply a growing demand for a growing global economy. That’s the solution. The solution isn’t to shrink demand,” North Dakota Senator Kevin Cramer said.

AAA says it’s hard to say with confidence where diesel prices are going, but the future’s market in the last few days, where diesel trades, has been trending lower.

Biden says releasing more oil from the reserve isn’t politically motivated even though midterm elections are 18 days away.