Diesel prices

Last week, President Trump announced that the United States would be receiving diesel shipments from Russia, a deal that would only make sense if it were necessary to avert catastrophe. For context, readers should understand that the diesel supply issue is now so chaotic that the US is importing fuel from Russia, suspending its previous sanctions regime in order to stabilise prices and fight inflation.

For historical background to help readers understand how baffling this news is, US soldiers last fought troops of Russian origin, the Wagner Group, at the Battle of Khasham in Syria in 2018, even though they were not Russian military; the Wagner Group works directly for Vladimir Putin to give him plausible deniability for covert actions.

This issue is of relevance to Trinidad and Tobago, as either the State will have to spend huge sums of money buying diesel on the global market and providing it to the private sector at subsidised rates, or the price of diesel will have to be increased. The questions I attempt to answer in this column will be: 1. What is diesel? 2. Why is it fundamentally important? 3. Why is the world experiencing diesel shortages and price increases?

While educating the public on the nature of diesel may seem pedestrian to some readers, I always keep in mind the need to educate when writing for the T&T Guardian. Diesel is a by-product of petroleum refining.

Around 30 per cent of an average barrel of oil is refined into diesel, with the remaining chemicals comprising around 45 per cent gasoline, and the remainder jet fuel and bitumen and is generalised by the chemical formula C12H23, as opposed to the formula for gasoline, C8H18.

Diesel molecules are larger and heavier and, as a result, carry more energy per unit of volume. This, combined with the high compression efficiency of diesel engines, means diesel vehicles get significantly better mileage than gasoline vehicles.

Diesel engines produce more torque than gasoline engines. Torque is defined as the turning power that causes an object to rotate; this is beneficial to large vehicles, tractors, trucks and heavy equipment. High torque is what helps a backhoe smash rock or lift objects, or a heavy truck go up a hill. Diesel is therefore the fuel of choice for most land-based transport for goods and heavy equipment needed for major industries such as construction.

Some 1.5 trillion litres of diesel are consumed per year around the world. The importance of diesel to the world economy cannot be overstated. Diesel shortages in breadbasket countries like the US, China, India and Brazil can mean farmers cannot fuel their equipment to plant or reap crops and transport them to market. This could have the knock-on effect of higher food prices globally. Higher diesel costs mean all shipping costs go up, as the price will be passed on to the consumer. Thankfully for Trinidad and Tobago, the US, the largest single exporter of food to T&T, is not running out of diesel, but prices are at all-time highs. US diesel prices reached the all-time high of US$6.53 per gallon in September 2026, up from $3.46 per gallon.

Since the closure of our nation’s oil refinery in 2018, T&T has imported diesel fuel mainly from the US. Trade intelligence platform Corplex states that, in 2025, T&T imported US$24.72 million in non-crude petroleum oils and preparations from the US, representing 76.76 per cent of the reported import origins for this category.

The question: Why is the diesel price so high can be answered with one word: War. To be specific, both the Ukraine-Russia and the Iranian wars have impacted oil shipments and destroyed oil refineries, thereby decreasing oil and diesel supply.

Refineries in Bahrain, the UAE and Saudi Arabia were impacted by missile or drone strikes from Iran and had to shut down. Ukraine has damaged 51 per cent of Russia’s refining capacity; the combined shortfall resulted in a global loss of 6 million barrels per day of refined products.

While most of T&T’s diesel comes from the US, US refineries are operating at full capacity and will inevitably need to shut down for maintenance. The US diesel market is connected to the international market, so US refiners can sell diesel to foreigners to find the best price.

It is inevitable that the T&T market will have to buy diesel at these record-high prices. T&T’s diesel prices are among the lowest in the world due to government subsidies; however, our neighbour Barbados pays the market rate of almost US$2 per litre, around $13.60 TTD per litre. I expect there will be increased prices for consumers as haulage fees go up worldwide.

The diesel crisis is so bad that the US is handing money to their rival Russia to prevent further consumer pain at the pump. For T&T, it is essential that the refinery be reopened soon to end our diesel supply woes. The closing of the refinery may thus turn out to be one of the worst decisions in our modern economic history.