US Department of Energy Pushes Refiners to Boost Diesel

The U.S. Department of Energy has called on refiners to ramp up diesel fuel production further, according to OilPrice citing two high-ranking officials from the department. Ongoing talks involve refiners both in the United States and abroad as part of federal efforts to push diesel prices down from all-time highs, with the national average remaining stuck above $6 per gallon.

The push follows a decision by President Trump to waive sanctions on Russian exports in a bid to secure additional diesel fuel supply. Russia previously issued a ban on diesel exports amid production disruptions from Ukrainian drone strikes on refineries. The ban was lifted following the sanction waiver, though analysts noted the volumes agreed upon by the United States and Russia are too small to make a substantial difference.

Additional Government Measures

Other measures pursued by the administration include the temporary removal of federal tax on red-dye diesel, normally sold exclusively to industrial fuel consumers in farming and construction, alongside an $8-billion fuel aid program announced by the Department of Agriculture. The federal government also invoked the Defense Production Act to motivate refiners to ramp up diesel output by restarting idle plants.

Energy Secretary Chris Wright noted that dialogues are ongoing to reopen every refinery possible, acknowledging that restart efforts present a significant challenge. Restarting idled refineries requires substantial time and capital, meaning it will not serve as an immediate fix for high diesel prices, even with $1 billion in funding under the Defense Production Act.

Key facts

• The U.S. Department of Energy called on domestic and international refiners to ramp up diesel fuel production.
• The national average for diesel prices remains stuck above $6 per gallon.
• President Trump waived sanctions on Russian exports to secure additional supply, following a previous Russian export ban.
• The administration invoked the Defense Production Act to motivate refiners to restart idle plants with $1 billion in funding.