The average price for a gallon of diesel fuel in Iowa is at a record high $6.06 a gallon today according to Triple-A.
R. Tyler Priest, a University of Iowa historian who’s written four books about the oil industry, said diesel fuel is often called “the workhorse of the global economy” because it fuels semis, combines and tractors, construction equipment, trains and ships. Barges also rely on diesel-powered tugboats. “The increase in diesel prices ripple through the economy in ways that gasoline does not,” Priest said. “Commerce and trade and food are all dependent on diesel fuel. Even though we consume a lot more gasoline than we do diesel, diesel is important to the economy in sort of a bedrock way.”
U.S. refineries tend to produce twice as much gasoline as they do what’s called middle distillate, which is used to make diesel and jet fuel. “We also get heating oil from middle distillate fuels,” Priest said, “so we’re entering the fall and the winter when there’s going to be additional demand to heat homes, so that’s going to put pressure on prices.”
Global supplies of gas, diesel and other petroleum derivatives are tight due to what’s going on in the Persian Gulf and in Russia’s war with Ukraine. Priest said refineries are “producing every barrel” of crude oil they can get. The U.S. is also exporting record amounts of diesel. “Late fall, early winter is also the time when refineries often shut down for maintenance,” Priest said, “so all these factors are going to converge and possibly drive prices even higher.”
The price of diesel in Iowa today is about 58% higher than it was a year ago. An analysis by Penn State University found Midwest farmers use about three gallons of diesel for every acre of corn and soybeans they harvest. That suggesting that with today’s price it will cost Iowa farmers at least $1200 more to harvest a 160-acre field of corn this year.
