Diesel prices have climbed to all-time highs, with the national average sitting around $6.30 per gallon and California drivers paying closer to $8.00, according to an analysis published by The Federalist. The piece argues that the pain at the pump is not the result of a crude oil shortage but rather a bottleneck at the refining stage — a problem compounded by a string of refinery closures, overseas disruptions, and this week’s attack on a Moscow-area facility.
The cost ripple is hard to miss. A full-size pickup with a 30-gallon tank now costs about $189 to fill, up from $105 previously, The Federalist notes. For a tractor-trailer with two 300-gallon tanks, a single fill-up runs roughly $1,890. Because long-haul trucks average about 7 miles per gallon, a cross-country run from New York to Los Angeles — roughly 2,800 miles — has gone from about $1,400 in fuel to $2,600.
Why refineries, not crude, are the problem
The oil business, as The Federalist describes it, is fairly straightforward: crude is extracted, shipped to a refinery, processed, sent to a retailer, and sold. Bottlenecks can emerge at any link in that chain. Right now, the analysis contends, the constraint is refining capacity, not the availability of crude.
That constraint has been building for years. Since 2020, 11 domestic refineries have either closed or been converted to renewable fuel production, representing a loss of roughly 900,000 barrels per day, according to the piece. The remaining plants have limited room to absorb the shortfall, meaning any additional loss hits prices harder. The last U.S. refinery with significant downstream unit capacity was built in 1977, the analysis adds.
International factors have tightened the squeeze further. Refineries in Dalian, China (410,000 barrels per day), Grangemouth in the United Kingdom (150,000 barrels per day), and Wesseling, Germany (150,000 barrels per day) have been sidelined, either because of prior weak demand or a shift toward sustainable fuels, per The Federalist.
On top of that, Ukrainian attacks have already destroyed three of Russia’s largest refineries — Kirishi, Syzran, and Saratov — and degraded two others, Volgograd and Norsi, to 25 percent capacity, according to the analysis. That represents a reduction of more than 1 million barrels per day. Saturday’s strike on the Kapotnya refinery in Moscow, which had been producing about 240,000 barrels per day, adds another layer of uncertainty.
Domestically, Exxon’s Joliet refinery in Illinois has been offline for a week after floodwater overwhelmed the plant, taking 275,000 barrels per day out of production. It had been expected to resume operations this week, but as of the analysis’s publication, it had not.
Short-term options on the table
The Federalist argues that because the problem is a refining bottleneck rather than a supply shortage, a few near-term moves could ease the pressure. The most immediate is repairing Joliet as quickly as possible — its location allows it to feed several Midwest states at low transport cost.
Beyond that, the analysis points to idle refineries in New Jersey and Nevada that, if brought back online, could together add about 25,000 barrels per day. It describes restarting them as relatively easy and quick.
There are also four U.S. refineries listed as closed that could potentially reopen if owners and regulators worked together: facilities in Benicia, Los Angeles, Houston, and Belle Chasse. Together, they could produce around 750,000 barrels per day, according to the piece. That would offset a significant share of the current shortfall.
The analysis also suggests using political pressure to encourage Ukraine to halt attacks on Russian refining capacity, though it acknowledges the strategic tension in that approach.
Some ideas that might seem appealing could backfire. Banning diesel exports, for instance, would offer only very brief relief while creating international shortages, which would ultimately push prices higher given that diesel is a global commodity. Shipping capacity is already limited, so an export ban would simply create another bottleneck, The Federalist argues.
Logistics managers, meanwhile, are already doing what they can to consolidate loads, shorten routes, and maximize mileage, the piece notes. Further efficiency gains are unlikely to move the needle much, since every penny saved already drops straight to the bottom line.
A problem without a quick fix
The Federalist concedes that this is not a situation that lends itself to fast solutions. But it contends that understanding the root cause — refinery capacity, not crude supply — opens the door to measures that could slow the rise in fuel costs and give Americans some relief. Those measures, it argues, could be implemented with little taxpayer cost, almost no federal legislation, and would leave the United States in a stronger strategic position.
The bottom line, as the analysis puts it: every gallon counts, and whatever is done needs to be done quickly.
Source: thefederalist.com — https://thefederalist.com/2026/09/23/what-the-trump-administration-can-do-right-now-to-lower-gas-prices/