California diesel prices hit record high

Diesel prices in the US state of California have risen to a record high, according to the latest data from the American Automobile Association (AAA).

The average price of diesel in California reached $7.018 per gallon on Tuesday, the highest level recorded in AAA's database. By comparison, the current US national average price for diesel is about $5.345 per gallon, Xinhua news agency reported.

US media reports attributed the rising diesel prices to reduced oil-refining capacity and disruptions in global energy shipments amid the war in Iran. California has lost two refineries since October 2025, eliminating roughly 20 per cent of its refining capacity.

The increase in diesel prices is driving up transportation costs, with potential ripple effects on food, building materials and retail goods shipped by diesel-powered trucks, reports said.

California continues to face limited refinery capacity amid the ongoing war in Iran, disrupting global shipments.

It's arguably the worst time for diesel prices to skyrocket.

"There's a lot of sleepless nights. There's a lot of stress, and people just trying to do the best they can," said Andrew Genasci, executive director of the San Joaquin Farm Bureau. "Anything that's coming onto the farm or leaving the farm is now more expensive."

According to AAA, this new price has topped all previous records, including the first few months of Russia's war in Ukraine in 2022.

A lot of oil is being held up by the closure of the Strait of Hormuz in the Middle East. Even if the strait opened now, all that oil still needs to make its way through the refineries, which means prices wouldn't immediately drop.