Liberty vs. the Leviathan: Banning Diesel Exports Won’t Lower Your Fuel Bill — It’ll Raise It

Diesel prices have gotten out of hand. Every trucker, farmer, and small business owner in Louisiana feels it every time they fill up. So when Washington starts talking about “fixing” it, it’s worth paying close attention. Unfortunately, the fix on the table right now would make things worse, not better.

Here’s the idea making the rounds in the Capitol: ban U.S. companies from exporting diesel. Senate Majority Leader John Thune said this week he’s willing to consider the idea, reasoning that if we’re producing diesel and shipping it overseas while Americans pay record prices at home, keeping that fuel here should bring prices down. It sounds simple. It sounds like common sense. It is neither.

It’s important to note that refiners don’t make diesel in isolation. Rather, they make it alongside gasoline.Every barrel of crude that goes into a refinery comes out as a mix of fuels, diesel included. Take away the export market and refiners can’t just keep making the same amount of diesel and stockpile the rest. They have to cut how much crude they run, period. The American Fuel & Petrochemical Manufacturers (AFPM) trade association estimates that could mean up to 4 million fewer barrels of crude processed per day, which would drag gasoline output down with it by something like 2 million barrels a day. You read that right: a policy sold as lowering diesel prices would tighten the gasoline market too, hitting every driver in the state, not just truckers.

This is price-control logic wearing an “energy security” costume, and we’ve seen this movie before.Whether it’s rent control, wage caps, or the credit card interest rate cap Washington flirted with earlier this year, government intervention in prices always produces the same result: less supply, not more, because you can’t repeal the law of supply and demand by executive order. Diesel would be no exception.

Louisiana would take a direct hit.As AFPM’s refiners have laid out, most U.S. refining capacity, and most of the diesel we export, sits right here on the Gulf Coast. The East Coast and West Coast rely on imports because there isn’t enough pipeline or shipping capacity to move fuel from us to them cheaply, so a ban wouldn’t even reroute much Gulf Coast diesel to those markets. What it would do is shrink the market for the fuel Louisiana refiners make, threaten Louisiana refining jobs, and leave import-dependent regions of the country more exposed to a shaky global diesel market, not less.

There’s also a bureaucratic problem lurking underneath all of this. An export ban would hand Washington the power to decide, barrel by barrel, who gets to sell fuel and to whom — a licensing regime run by unelected officials deciding which companies win and which lose, dressed up as a consumer protection. That’s not how free markets work, and it’s exactly the kind of quiet expansion of federal control that starts as an “emergency measure” and never quite goes away. Once government gets a taste of picking winners and losers in energy markets, it rarely gives that power back.

Foreign refiners, meanwhile, would be thrilled.They’d keep buying cheap American crude and exporting the diesel it makes into markets we walked away from — Mexico, Latin America, Europe — while hostile competitors like Russia expand their footprint in those same markets. We’d be handing away energy influence we spent decades building, all while doing nothing to fix the actual cause of high prices: a global supply crunch tied to the wars in Ukraine and the Middle East.

Washington could also help without banning anything at all. EPA is sitting on an overdue Renewable Fuel Standard rule for 2026 and 2027, and the uncertainty around it, including whether small refinery exemptions will be granted or clawed back, is adding its own cost and volatility to diesel markets. Finalizing that rule with the current small refinery exemptions preserved or, better yet, repealing it altogether, would do more to ease prices than a new export ban ever could.

The honest fix for high diesel prices isn’t a ban, it’s more supply. That means permitting reform, pipeline capacity, and policies that let American refiners run flat-out instead of policies that force them to throttle back. At the Pelican Institute, we’ve made that case again and again on energy: Louisiana’s road to lower costs and real energy dominance runs through unleashing production, not restricting it.

Washington should let markets do what they do best: move fuel to where it’s needed, at the lowest possible cost instead of reaching for a bureaucratic lever that would leave Louisiana refiners worse off and every American driver paying more.