Overview
- Global crude has moved above $100 a barrel and diesel has hit multi-month or record highs in several markets, according to price data cited across reports.
- Refinery outages and reduced refining capacity have pushed refined diesel prices up more than crude, tightening supplies and raising local pump costs.
- Governments have stepped in with temporary measures this week, with Mexico boosting diesel subsidies and Germany announcing relief plans, while Spain’s reduced fiscal discounts are set to expire on September 30 and face pressure for extension.
- High diesel is raising operating costs for trucks, farms and logistics, with U.S. farm diesel at record levels and many Spanish service stations charging over €2 per litre, which will feed into higher transport and food prices.
- Whether prices ease will depend on the duration of the Iran-related conflict, repair of regional export routes and the pace at which refinery capacity is restored, risks that keep volatility and fiscal costs elevated.