The United States has used a 1950 authority to help boost fuel production at a small Texas refinery, Vice President JD Vance said on Tuesday, as the administration runs through its options for lowering record fuel prices. The Defense Production Act, enacted at the start of the Korean War, gives the president broad power to direct private businesses to produce critical materials for national defence and emergency preparedness. Vance said the administration is working with Delek to expand its refinery in Tyler, Texas, a 74,000 barrel a day plant, to produce millions of additional gallons of commercial grade and military specification fuel.
No timelines or volumes were provided, and additional output is unlikely to reach the market within the three weeks before the midterm elections on November 3. The move follows a sequence of measures in recent weeks: a diesel export ban that was entertained and then ruled out, and the announced deal with Russia for diesel deliveries.
Prices explain the urgency. The national average for regular gasoline was $4.34 a gallon on Tuesday, a record for October and the first October average above $4. Diesel averaged $6.28 a gallon, down from $6.31 a week earlier but far above $3.65 at this time last year, and wholesale diesel markets are not pricing relief: ultra-low sulfur diesel in New York and gasoil in London both traded around $200 a barrel on Tuesday, Saxo Bank’s Ole Hansen noted.
The arithmetic limits every lever. The Russia deal, if executed, totals 35.76 million barrels, equivalent to about 10 days of US diesel demand or just over one day of global demand, analysts say. A refinery expansion ordered under emergency powers is a statement about how long officials now expect the shortage to last, not a source of fuel for this quarter.