Gov. Jeff Landry’s Diesel Export Ban Idea Meets Pushback from Oil and Gas Industry

LAFAYETTE, La. — Diesel prices in Lafayette hit a record $6.05 a gallon Monday, and Gov. Jeff Landry wants Washington to respond with a 90-day ban on U.S. diesel exports. The state’s own oil and gas industry says that idea would backfire, a pushback detailed by The Advocate.

Unleaded gasoline in Lafayette also climbed to $4 a gallon Monday. Nationally, the average diesel price rose about 40 cents a gallon in a single week to $6.51 a gallon, more than $2.80 higher than this same day last year.

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What Landry Is Actually Proposing

Landry laid out his plan on social media, calling for a 90-day moratorium on U.S. diesel exports along with a permanent exemption for small refineries from rules requiring them to pay roughly $13 more per barrel of crude oil, a break he said covers refineries responsible for about 10% of the nation’s fuel supply. He put it plainly in a post on X: halting exports for three months would build up domestic supply and bring diesel prices down.

He made a similar case on CNBC, framing the export flow as a subsidy for foreign buyers at the expense of American drivers. “Right now a record amount of diesel is going to Europe and Americans are subsidizing Europe’s problems,” Landry said, adding that Europe has “done nothing to help America” with the wars in Ukraine and Iran that he blames for the price spike.

Asked directly about industry pushback, Landry didn’t back down. “The majors out there, those that are exporting, are making record profits and I don’t have a problem with them making those particular profits,” he said. “The American citizens should not be subsidizing Europe’s problems at a time when Europe refuses to help America.”

Why Lafayette Prices Keep Climbing

The run-up isn’t isolated to Acadiana. Diesel has always run more expensive than gasoline because of higher taxes, tighter refining margins, and stronger global demand, but this spike is steeper than normal. The national average has jumped roughly $2.80 a gallon year-over-year, a swing tied largely to war-driven disruptions in European and Middle Eastern energy markets that have pulled American fuel toward overseas buyers.

That’s the exact dynamic Landry is targeting, and it’s why farmers heading into harvest season, truckers, and Northern homeowners who rely on diesel and heating oil are feeling it hardest.

Louisiana’s Own Industry Pushes Back

The trade associations pushing back represent Louisiana’s own refineries, the ones lining the Mississippi River corridor and the Lake Charles ship channel.

Tommy Faucheux, president of the Louisiana Mid-Continent Oil and Gas Association, an organization dating back nearly a century to the birth of the Gulf Coast refining industry, said the pipelines that would need to carry redirected diesel are already running at capacity. “Without available capacity to redirect supply, halting the export of American diesel would force refineries to reduce production, which would also decrease the production of gasoline,” Faucheux said in a statement.

“This is a misguided proposal that would cause more harm and increase, not decrease, costs for American families and businesses.”

Mike Moncla, president of the Louisiana Oil & Gas Association, echoed the concern, warning an export ban could ripple through other parts of the energy supply chain. The Louisiana Association of Business and Industry raised a similar flag. LABI President and CEO Will Green said he shares the governor’s goal of lowering costs for farmers and trucking companies but questioned whether a ban gets there.

“The result could be precisely the opposite of what policymakers intend: less refining; fewer total gallons of diesel, gasoline and jet fuel; tighter inventories; and higher prices, effectively trading a diesel problem for a broader fuel supply problem,” Green said.

American Fuel & Petrochemical Manufacturers, a national refining trade group, backed up the capacity argument with numbers: U.S. refineries produce about 5.3 million barrels of distillate fuel a day, while Americans use roughly 3.6 million barrels a day domestically. Because gasoline and diesel come out of the same refining process, the group said, refiners can’t simply stockpile the surplus if exports stop. They’d have to cut production of both fuels at once.

U.S. Secretary of Energy Chris Wright made the same point in a recent interview, saying a ban would force a cut in refining because the country lacks the domestic pipeline and storage capacity to absorb the diesel that currently goes overseas.

What an Economist Says Actually Happens

LSU Energy Institute professor Gregory Upton offered the clearest breakdown of the tradeoff. Basic economic theory suggests domestic diesel prices would fall and international prices would rise if American exports were banned, but how much depends entirely on logistics. “The magnitude of the domestic effect would depend on how much diesel could be stored or moved from exporting regions to other U.S. markets, and on how refiners responded,” Upton said.

Because diesel, gasoline, and other fuel products come from the same interconnected refining process, he added, refiners have limited room to shift what they produce.

Which outcome plays out depends on how much spare storage and pipeline capacity refiners actually have, a detail few drivers ever see.

A Fight That’s Bigger Than Louisiana

Landry isn’t out on this limb alone. Republican candidates in agricultural districts have been raising the alarm as harvest season approaches and midterm elections loom, worried farmers will blame the party if fuel costs eat into their margins. U.S. Sen. Chuck Grassley, R-Iowa, and members of that state’s GOP delegation pushed President Trump over the weekend to enact a diesel embargo similar to one used in the 1970s.

“High diesel prices ARE KILLING FARMERS INCOME,” Grassley wrote in his X post. U.S. Rep. Tim Burchett, R-Tennessee, has introduced legislation to do the same thing nationally.

U.S. Agriculture Secretary Brooke Rollins told reporters that Trump called her Monday specifically to talk through diesel prices, POLITICO reported. The White House and Louisiana’s congressional delegation, which includes the U.S. House’s top two leaders, were unable to immediately comment.

The standoff pits Republican officials worried about farmers and drivers against Republican-aligned energy companies worried about production, with Louisiana positioned on both sides of the debate. No decision has come out of Washington yet, and until one does, diesel prices in Lafayette are likely to stay elevated.

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