Fuel And Energy Prices Up Across The Board

Contrary to some public perceptions regarding fuel and energy costs, prices have risen nationwide. Data from the American Automobile Association indicates that all grades of gasoline and diesel have increased compared to last year, with diesel experiencing a notable rise of 25 cents per gallon on a national average. Discussions about gas price trends often arise due to significant regional fluctuations, which can occur not only between states, but also within individual communities. For example, in Texas, prices can range from $3.49 per gallon in Brewster County to $2.29 per gallon in Harris County—a difference exceeding one dollar within the same state. Nationally, gasoline prices have shown only a slight increase and remain relatively stable.

The situation regarding diesel prices is notably distinct. Typically, during the summer months in the United States, inventories of distillate fuels—such as diesel and home heating oil—are increased to meet higher demand in winter. However, this year, it was not possible to build such a buffer. According to the Energy Information Administration, distillate inventories are projected to reach their lowest level in over ten years by the end of 2025. This development is attributed to increased export demand to Europe, as ongoing conflict in Ukraine continues to impact Russian energy infrastructure, and to reduced refinery capacity compared with previous years, resulting in throughput that does not meet global demand. Inadequate inventory levels are expected to sustain elevated market prices for these products. Moreover, the EIA anticipates no improvement in 2026, forecasting that inventory levels at the close of next year will be even lower than those of this year.

Recent developments regarding electricity prices remain concerning. According to the EIA, electricity prices in the United States have consistently outpaced inflation since 2022, with an increase ranging from 4% to 10% this year depending on the region. It is important to note that electricity prices differ from electricity bills, as bills include additional costs such as transmission and delivery, which have also risen significantly nationwide. The Electricity Transmission Competition Coalition reports that electricity inflation is now exceeding the Consumer Price Index by 300%. Factors contributing to these increases include an aging electrical grid unable to adequately support rising demand driven by population growth and expanding industrial needs, particularly data centers. Additionally, growing natural gas prices are expected to further elevate costs. The EIA anticipates the price of natural gas purchased by power plants will rise by 37% this year. As power plants incur higher fuel expenses, these costs are likely to be transferred to both commercial and residential customers. This escalation will not only affect household electricity expenses but is also projected to impact the cost of goods and services due to increased energy expenditures across various industries.

Overall, the primary concern moving forward involves not only electricity prices but also the reliability of the power grid. After nearly two decades of flat demand, electricity consumption is now increasing at a rate exceeding 2% per year. While this figure may initially appear modest, such sustained growth poses significant challenges for power generation infrastructure. Projects aimed at expanding capacity and enhancing the grid often require several years to complete. Notably, current projections indicate that approximately 7,500 miles of new high-voltage transmission lines are needed annually to meet demand; however, only 350 miles are presently being constructed each year. If the grid is not expanded to accommodate rising demand, there is a heightened risk of increased brownouts and blackouts, particularly during periods of extreme temperatures when these disruptions can be most hazardous.

Source: https://www.forbes.com/sites/mattrandolph/2025/11/19/fuel-and-energy-prices-up-across-the-board/