US coaxing refiners to produce more diesel as prices surge, energy officials say
USO•Two US Energy Department officials said they are working with refiners at home and abroad to increase fuel output as diesel prices surge. Retail diesel averaged about $6.32 a gallon, while US refiners were running at 95% to 100% of capacity.
1. Efforts to boost output
Energy Secretary Chris Wright said the administration was discussing reopening refineries and working with India to increase refining output. He said the effort to reopen facilities was challenging and not all proposals would happen. The administration has also invoked the Defense Production Act to boost output and allowed commercial vehicles to use red-dyed diesel.
2. Limited US capacity
US refiners are running at 95% to 100% of capacity, American Petroleum Institute CEO Mike Sommers said, adding that refiners were postponing planned maintenance because of high prices. Sommers said restarting idled plants under the Defense Production Act would require substantial capital. Refinery expansions can take months or years to complete.
3. International supply measures
The administration has urged Europe to release 50 million barrels of diesel, but an agreement among industrialized nations fell short of that target. The International Energy Agency said it would speed the release of pledged oil and product volumes, including more than 20 million barrels of diesel as soon as possible. The administration also temporarily waived sanctions on Russian diesel; Wright said any Russian diesel reaching the US would likely go to New England.
