Although crude oil prices are expected to be up slightly on average next year, the on-highway diesel retail prices are projected to average $3.91 per gallon in 2009--lower than the 2008 projection, according to the Department of Energy (DOE) Short Term Energy Outlook released October 7.
DOE projects an average price of $4.01 per gallon in 2008, reflecting a weakening of the very high wholesale distillate-crude oil price margins seen this past summer.
The increases in diesel fuel prices this year have outpaced the rise in crude oil prices because of the continuing stronger growth in global distillate demand relative to other petroleum products. However, DOE noted that refinery shut-ins caused by Hurricanes Gustav and Ike reduced inventories to relatively low levels.
Last week's average price of diesel was down 8.4 cents per gallon to $3.875 per gallon. That compares with $3.035 per gallon for the same time last year.
Last week, the average prices of low sulfur diesel and ultra low sulfur diesel were $3.781 and $3.887 per gallon, respectively. The low sulfur diesel price was down 10 cents per gallon from the week before while the price of ultra low sulfur diesel fell just over eight cents.