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President Donald Trump says he wants to keep American diesel at home. Speaking to reporters at the United Nations General Assembly on Tuesday, he said, “I’ve said let’s not send out the diesel.” (1)
It’s easy to see why the idea is tempting. Diesel spiked above $6.50 a gallon over the weekend for the first time on record, and it’s up 83% so far this year — on pace for the biggest annual jump since AAA started tracking diesel in 2000. (1)
The causes are global: the Iran war has choked off diesel exports from the Middle East, drone strikes have knocked out Russian refineries, and both Russia and China have restricted their own exports. (1) Meanwhile, regular gas is averaging about $4.48 a gallon nationally. (2)
For the record, a White House official told CNN on Monday that an export ban isn’t being considered at this time. (1) But the president’s comments — and a growing list of Republicans pushing for one — keep it on the table.
I’ve been writing about money for more than 35 years, and I’ve learned to watch diesel more closely than gasoline. Here’s why: You may never buy a gallon of it, but you pay for it on almost everything you buy.
Trucks carry roughly 72.6% of the nation’s freight by weight, according to the American Trucking Associations. (3) So would a ban actually help your budget? Here are five things to know — including why people on the coasts could end up paying more, not less.
1. Diesel is the price hidden in everything
Diesel powers the trucks, trains, tractors and ships that move the economy. (1) When it jumps 83%, that cost doesn’t stay at the truck stop.
It shows up in what you pay for groceries, in delivery fees, in the plumber’s trip charge and in the price of just about anything that rode on a truck to get to you. Farmers feel it first — and then we all do at the checkout.
2. A ban might cut prices — but only in some places
Here’s the catch. Energy analyst Bob McNally of Rapidan Energy Group told CNN a ban could knock dimes per gallon off diesel along the Gulf Coast and in the Midwest, because fuel refined there would be trapped at home. (1)
But the East and West coasts depend on imports and have less access to Gulf Coast fuel. McNally warned those regions could see sudden price spikes. (1) An economist at the Federal Reserve Bank of Dallas made a similar point: Surging global prices would bounce right back onto the East Coast. (1)
As someone who lives in South Florida, that got my attention. A policy sold as relief could leave millions of Americans paying more.
Quick gut-check — if your money advice is coming from random online influencers, you’re playing a dangerous game. I’ve been a CPA since 1981 and writing about money since before the internet existed. Sign up for the free Money Talks Newsletter and get expert advice that’s been tested by time.
3. Your gasoline could get more expensive, too
Right now, U.S. refiners are among the few in the world still running full tilt. If they couldn’t sell diesel overseas, analysts say they’d likely process less crude oil overall — which means less gasoline and jet fuel, too. (1)
One Houston oil consultant told CNN the price of gasoline could soar under a ban, and the head of the American Petroleum Institute warned it would make the problem worse for consumers. (1)
Whether or not a ban happens, pump prices are a real squeeze right now. Gas prices swing, but you’re driving past cash back every week. Upside is a free app that pays you real cash — up to 25¢ a gallon — at stations you already use, including Shell, BP, and Exxon.
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4. Don’t count on relief anytime soon
The researchers CNN spoke with agreed on one thing: The most reliable way to bring energy prices down is an end to the Iran war, not export limits. (1)
And more refining capacity won’t appear overnight. A major new oil refinery hasn’t been built in the U.S. since 1977. (1) Translation: Plan your budget as if high fuel costs are sticking around for a while.
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5. Plug the leaks you can control
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The bottom line
I understand the appeal of banning diesel exports. Farmers are hurting, truckers are hurting, and “keep our fuel at home” sounds like common sense.
But markets don’t respect borders the way slogans do. A ban could lower prices in Texas while raising them in New York and Florida — and possibly push up what everyone pays for gasoline.
The lesson for your wallet is the same either way: Don’t wait for Washington to fix your budget. The cheapest gallon is the one you don’t burn, and the easiest raise you’ll ever get is the bill you stop overpaying.
Sources: 1. CNN via CP24; 2. AAA; 3. American Trucking Associations;
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