The Diesel Crack Spread Explained: What It Means for Paving Companies

The diesel crack spread is the difference between the wholesale price of a gallon of diesel and the price of the crude oil it comes from. EIA uses it as a proxy for refinery margins, so a wide spread means refiners are making a lot on every barrel they turn into diesel.

Traders quote it in dollars per barrel, and a barrel is 42 gallons. The record $108.02 a barrel in early September works out to about $2.57 of margin on every gallon.

You will also hear about the 3-2-1 crack spread. That is three barrels of crude set against two barrels of gasoline and one of ultra-low-sulfur diesel, about the mix a typical refinery produces. The diesel crack spread isolates the diesel part, which is the part we pay for.

Diesel is expensive because refined diesel is short. Crude is high too, and the shortage sits on top of that. Refining is down in Russia, China and the Middle East, and U.S. distillate inventories sat 13% below the seasonal average, so margins and pump prices both went up.

Four things are stacked on top of each other:

Not quickly. EIA's September outlook assumes global distillate production stays below last year's levels in the coming months, which it expects to keep exports high, inventories low and prices elevated.

Retail diesel has eased two weeks in a row, from $6.529 on September 21 to $6.199 on October 5, but that is still $2.49 above a year ago. Three things would change the picture: Gulf shipping getting back to normal, Russian refineries coming back, and U.S. inventories rebuilding. Until I see those, I would price bids and budgets on fuel staying well above 2025.

Asphalt binder is a petroleum product, so the same refining squeeze pushes it up, and diesel is in every step of making and placing a ton of mix: quarry haul, plant burners, trucking and paving equipment. State binder indexes show how big the move was this year.

For comparison, in the San Francisco Bay Area, as of October 2026, hot mix asphalt runs about $78 to $130 per ton depending on where you buy it. That is my own observation, not a published index. For how plant price, delivered cost and installed cost differ, see asphalt price per ton, and run your own tonnage through the asphalt cost calculator.

Every truck, paver, roller and loader on a job burns diesel, so a rise of about $2.50 a gallon lands on every ton you lay. It hurts most on work bid earlier in the year under lower fuel assumptions, because a fixed-price contract has no room to pass the increase on.

In the San Francisco Bay Area this year, the asphalt I buy has gone up across the board by several dollars per ton. One or two of the hot plants I deal with have also added an extra charge of about $5.90 per ton, an increased oil price charge, which is a temporary price increase. Trucking has gone up too. What I pay for trucking went from $125 an hour to $130 an hour, and I know part of that is fuel.

Smaller firms feel it sooner. Cash reserves are thinner, there is less volume to push on supplier terms, and the timing is bad: revenue slows into fall and winter while fuel stays high and overhead keeps running. In practice that shows up as thinner margins on work you have already won, jobs that get delayed or cut back, and tighter cash while fuel and material invoices stay high and new work slows.

Measure fuel by machine and by job first, then go after the biggest sources: idle time, haul distance and over-ordering. On the contract side, put fuel and binder escalation language into new bids and shorten how long your prices are good for.

Diesel stays expensive because refined diesel is short, and the crack spread is the clearest sign of that shortage. Binder and mix are going up for the same reasons.

Treat fuel and binder as a standing cost risk. Check your open bids against today's numbers, and put the protection in writing on the next ones. Prices on this page were checked on October 11, 2026, and EIA updates retail diesel every week.