The weekly benchmark diesel price used as the basis for most fuel surcharges made its largest upward move since January and the third-largest increase since the start of 2024.

The price published by the Department of Energy/Energy Information Administration effective Monday rose 10 cents/gallon to $3.571/g. It’s the biggest increase since January 20. There was only one larger upward move in 2024.

Retail prices lag movement in futures prices (though wholesale prices react quickly to changes in the futures market). Given that, attributing the higher benchmark to the increases in futures prices spurred by the Iran-Israel war might not be accurate.

Before oil and diesel prices started to move higher on the back of Israel-Iran military action, there had been a strong upward push in the price of ultra low sulfur diesel (ULSD) on the CME commodity exchange that appears to be the primary cause of this week’s big increase in the benchmark.

From a settlement of $2.0445/g on June 2, ULSD climbed as high as a settlement of $2.2053/g on Wednesday. It dipped slightly Thursday, but roared ahead by 17 cts/g on Friday, after the military action between Iran and Israel commenced.

ULSD Monday rose 3.46 cts/g, coming on a day when crude prices fell due to a perception in the market that the war’s impact on oil supplies might be limited.

Diesel’s upward move Monday in contrast to the decline in crude could reflect the fact that if any Iranian supplies are impacted by the war, its crude is a heavier grade that would yield more diesel than gasoline. The front-month spread between ULSD and Brent Monday was just under 65 cts/g, the highest it had been since February.

With no signs of the conflict easing Tuesday, ULSD at approximately 10 a.m. was up 7.56 cts/g to $2.4689, a gain of 3.15%. If it settled there, it would be the highest ULSD settlement since February 20.

The American Automobile Association’s daily estimate of the national average diesel price Tuesday, released in the morning, was not far off from the DOE/EIA price. That price posted Tuesday by AAA was $3.567/g. That was up more than four cents from Monday’s level of $3.524/g and up slightly more than 6 cts/g from a week ago.

Going right to the source, a review of the downloadable pump prices at Pilot Flying J shows a clear upward trend, but not across the board. The increases could also reflect local conditions not tied to the broader diesel market.

But some of the increases in effect Monday compared to Friday were significant. A 41-cent increase between Monday and Friday was recorded at Grand Prairie, Texas; prices were up 25.1 cents in White Hills, Arizona.