EIA Raises 2027 Diesel Forecast to $5.03 a Gallon
The Energy Information Administration's latest outlook lifts its diesel price projection as refinery damage keeps fuel supplies tight.
Updated on Nov. 12, 2026 in Inflation
Live Poll
Do you expect fuel costs to keep your household's prices higher next year?
The U.S. Energy Information Administration raised its forecast for the 2027 average U.S. retail diesel price to $5.03 a gallon, up from $4.49 in its October outlook. Separately, Federal Reserve Vice Chair for Supervision Michelle Bowman warned that higher fuel costs could keep core inflation elevated.
Why it matters
The EIA attributes elevated refining margins to damaged refineries in the Middle East and Russia, which have reduced product exports and supported wider crack spreads. Because fuel costs feed into broader prices, the revision bears directly on the inflation outlook the Federal Reserve is weighing.
The EIA's forecast is a projection from a government energy outlook, with 2027 diesel at $5.03 a gallon, a 12% upward revision from October's $4.49, and Brent crude averaging $86 a barrel. The projection does not resolve when Middle East and Russian refinery capacity will fully return.
The players
U.S. Energy Information Administration
The EIA is the statistical and analysis agency within the U.S. Department of Energy that publishes the federal government's official energy price and supply forecasts.
Michelle Bowman
Michelle Bowman is the Federal Reserve Vice Chair for Supervision, responsible for overseeing bank regulation and supervision within the Federal Reserve System.
The details
The EIA said its November 10 outlook was finalized using inputs from November 5 and expects petroleum-product supply constraints to persist through the end of 2027. The agency expects refinery disruptions to be concentrated early in 2027 and constraints to ease thereafter.
Timeline
October 6, 2026: EIA issued its prior diesel forecast of $4.49 a gallon for 2027.
November 5, 2026: EIA outlook inputs were finalized.
November 9, 2026: Federal Reserve staff research on oil-to-core inflation transmission was released.
November 10, 2026: Bowman delivered her speech and the EIA published its updated outlook.
Inflation Trajectory
The November revision reverses the easing path implied by the EIA's October 2027 diesel forecast of $4.49 a gallon, pushing the projected average up 12%. That shift makes fuel a more persistent input into the core inflation the Federal Reserve is trying to bring toward 2%.
A projected $5.03 average for diesel points to higher costs for freight and goods that depend on trucking, which can flow into grocery and retail prices. Households may see the effect in everyday prices rather than at the pump alone.
The takeaway
Fuel costs move through the economy well beyond the gas station, so the diesel outlook is worth watching alongside inflation data. Tracking the EIA's updated forecasts can help readers anticipate where price pressure may build.
Further reading
For more on how energy costs shape price trends, see Inflation coverage across the United States.
Live Poll
Do you expect fuel costs to keep your household's prices higher next year?
