Drivers finally got a break this week. The national average for regular gasoline fell to $3.995 a gallon on Monday, its first reading under $4 since mid-July, according to the Energy Information Administration. Truckers and farmers did not get the same break. Diesel prices still averaged $6.127 a gallon.
That gap matters more than the headline. You may never buy a gallon of diesel. Still, you pay for it every time a truck delivers groceries, a combine brings in corn, or a package lands on your porch.
Washington is already lining up quick fixes. Most of them miss the real problem, which is simple: America is short on diesel, and no tax holiday changes that.
Gas Slipped Under $4. Diesel Barely Budged.
Start with the last four weeks. From Oct. 12 to Nov. 9, gasoline fell about 34 cents a gallon. Over the same stretch, diesel fell about 5 cents.
Look back further and the gap gets wider. In the week of Feb. 23, just before the Iran war began, gas averaged $2.94 and diesel averaged $3.81. Since then, gas is up about $1.06 a gallon, or 36%. Diesel is up about $2.32, or 61%.
Compared with a year ago, EIA’s own table shows diesel up $2.29 and gasoline up 94 cents. In other words, diesel has climbed more than twice as much as gas in cents per gallon.
Diesel did come off its peak. It hit a record $6.53 on Sept. 21. But a 40-cent dip from a record is not relief when the price is still more than $2 above where it started the year.
A Record Gap Between Diesel Prices and Gasoline
Here is a number you will not see in most headlines. On Nov. 2, diesel cost $2.14 more per gallon than regular gas. That was the widest gap in EIA’s weekly records, which go back to 1994. This week’s $2.13 gap is the second widest.
Before this year, the record was about $1.61, set in November 2022. Back then, Russia’s invasion of Ukraine had squeezed global diesel supply. So the current squeeze is not a normal seasonal bump. It is roughly a third worse than the worst stretch of the last energy crisis.
Why Diesel Prices Are Stuck
The chart’s right side explains it. Distillate stocks, which include diesel and heating oil, fell to 99.3 million barrels in the week ending Oct. 30. That is the lowest level since May 2003. It is also the lowest late-October level in EIA’s weekly data, which starts in 1982.
Those stocks are down about 11% from a year ago. They are down about 25% from their January peak of nearly 133 million barrels.
Meanwhile, the refineries are not slacking. EIA’s November Short-Term Energy Outlook says U.S. plants have been running at “very high rates” in 2026. They are chasing high profit margins caused by damage to refineries in the Middle East and Russia, which cut the fuel those regions normally export.
At the same time, America has less refining capacity than a year ago. EIA points to the closure of Valero’s Benicia refinery in Northern California in early 2026. Because EIA now expects global fuel supplies to stay tight through 2027, it raised its 2027 diesel forecast to $5.03 a gallon, up from $4.49 just a month earlier.
The war still sets the mood, too. On Wednesday, Iran’s army said an oil tanker caught fire after hitting a naval mine in the eastern Strait of Hormuz, Reuters reported. Each incident like that keeps insurance and shipping costs high.
Who Really Pays When Diesel Prices Stay High
Diesel is the fuel of the working economy. It powers semis, tractors, combines, grain dryers, freight trains, barges and construction equipment.
So a $2 jump in diesel works like a hidden sales tax on almost everything. Trucking firms add fuel surcharges. Farmers pay more to plant, harvest and haul. Those costs show up later in shelf prices, not at the pump.
That also helps explain why inflation keeps running hot. Our look at October CPI found monthly price gains still too fast for the Fed’s comfort. Expensive diesel is likely one reason businesses keep raising prices.
Heating oil is the same fuel family, too. Families in the Northeast who heat with oil face that same tight supply as winter arrives.
What Washington Is Offering
Both parties sense the anger. Voters made fuel costs a top issue in the midterms, and the incoming Congress wants to show it heard them.
Democrats: Suspend the Federal Fuel Tax
Several newly elected Democratic senators want to pause federal fuel taxes, USA Today reported. “I think we could suspend the federal gas tax and the federal diesel tax,” Texas Senator-elect James Talarico said Nov. 4.
Kansas Senator-elect Adam Hamilton wants the tax suspended “until the Iran war ends.” Iowa Senator-elect Josh Turek has also called for pausing diesel exports and tapping the Strategic Petroleum Reserve.
Some Republicans: Ban Diesel Exports
This is not only a Democratic idea. In September, Rep. Andy Harris of Maryland filed a bill to suspend federal fuel taxes through Dec. 31. Rep. Tim Burchett of Tennessee filed two bills to restrict diesel exports, CNBC reported. One would trigger a ban whenever diesel averages $5 a gallon.
The White House: Russian Diesel
The administration chose a different route. On Oct. 9, Treasury issued General License 135, which allows sales and imports of Russian diesel through April 7, 2027. Sen. Richard Blumenthal has argued the license cannot override the 2022 law banning Russian oil imports.
Diesel still rose through late October after that license, and it sits above $6 today.
The Conservative Case: Fix Supply, Skip the Gimmicks
Every one of these ideas shares a flaw. They treat a supply shortage as a pricing problem.
A Tax Holiday Is Pocket Change With a Bill Attached
Start with the math. The federal diesel tax is 24.4 cents a gallon. Diesel is up about $2.32 since February. Even if every penny of a tax holiday reached buyers, it would erase only about a tenth of the increase.
Besides, it probably would not all reach buyers. When supply is tight, sellers can keep part of a tax cut as margin. Then the Highway Trust Fund, which already leans on general-fund bailouts, would need more borrowed money. That is a deficit-financed giveaway with a short shelf life.
Conservatives should welcome lower taxes. However, a temporary holiday is not a tax cut. It is a spending decision dressed up as relief.
Export Bans Shrink Supply
Burchett’s idea feels patriotic, but it backfires. Diesel is priced in a world market. If U.S. refiners cannot sell abroad, they have less reason to run hard, and Gulf Coast plants could cut output. Our allies would scramble for fuel, and global prices would climb. That is the opposite of what drivers need.
Russian Barrels Are a Crutch
Buying Russian diesel may shave a few cents. But it sends cash to Moscow while U.S. envoys try to push Russia toward a Ukraine deal. It also leaves our supply at the mercy of Putin’s refineries. America should not trade one dependency for another.
What Would Actually Bring Diesel Prices Down
The real answer is more fuel made at home and moved freely. First, pass real permitting reform so refinery expansions and pipelines can get built. We made that case in our post on the permitting reform bill. Second, waive the Jones Act for fuel shipments so Gulf Coast diesel can reach the East Coast on any ship, not only U.S.-built ones. Third, keep the pressure on to secure Hormuz shipping lanes, because insurance costs fall only when the mines stop.
Punishing producers will not help either. As we argued about the windfall profits tax, taxing refiners does not add a single gallon.
What to Watch on Diesel Prices Next
First, watch this week’s EIA inventory report. Another drop in distillate stocks would push them further into record-low territory.
Next, watch Monday’s price survey on Nov. 17. If gas keeps falling and diesel stalls again, the record gap could widen.
Then watch the highway bill. The current extension of federal highway funding expires in December. That is where any fuel-tax holiday would likely ride.
Finally, watch Hormuz. EIA expects Brent crude to average $99 a barrel in December. Fewer mine strikes would help that forecast come true.
Cheaper gas is good news. But diesel moves the economy, and diesel is still in short supply. Washington should spend less time on gimmicks and more time clearing the way for American refiners to make more of it.
Sources
- U.S. Energy Information Administration: Gasoline and Diesel Fuel Update (Nov. 10, 2026 release, prices for the week of Nov. 9) and full weekly price history
- U.S. Energy Information Administration: Weekly U.S. Ending Stocks of Distillate Fuel Oil (through Oct. 30, 2026)
- U.S. Energy Information Administration: Short-Term Energy Outlook, U.S. Petroleum Products (Nov. 10, 2026)
- U.S. Treasury, Office of Foreign Assets Control: Russia-related General License No. 135 (Oct. 9, 2026)
- USA Today: New senators have a plan to lower gas prices. Will it work? (Nov. 5, 2026)
- CNBC: Gas tax holiday, commuter deduction: Congress’ fuel-price proposals (Sept. 22, 2026)
