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U.S. Gas Prices Hit August Record as Global Refinery Shortage Deepens. U.S. drivers are on track to face the most expensive August on record for gasoline and diesel, with prices remaining at historically high levels. The national average for regular gasoline has reached about $4.07 a gallon, while diesel has climbed to $5.40, both setting records for this point in August. The increase is being driven less by the price of crude oil than by a global shortage of refining capacity, which has made it harder to turn oil into gasoline and diesel. Around 7.5 million barrels a day of refining capacity have been lost worldwide, with damage to facilities in the Middle East and Russia worsening the supply crunch. Russia, which accounts for roughly 10% of global diesel supplies, has halted diesel exports through the end of the year after losing an estimated 40% of its refining capacity. The disruption has forced the U.S. to supply more diesel to international markets, pushing domestic inventories to about 10% below their five-year average and driving wholesale prices higher. A decline in crude oil prices may provide limited relief, as the shortage of refining capacity is keeping fuel prices high, while upcoming refinery maintenance could put additional pressure. The prolonged rise in gasoline and diesel costs could also add to inflationary pressures, particularly if fuel inventories continue to fall and refiners reduce operations.
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