Diesel fuel is a staple for the farmers and truckers who supply Americans with their essential needs – and its price has skyrocketed in recent months, driven by inflation to far outstrip regular gasoline in price hikes.
AP reports diesel fuel was averaging $5.52 a gallon nationally Tuesday — up a dizzying 68 percent from a year ago, when it was selling for just $3.28. By comparison, a gallon of regular gasoline is averaging $4.50, up 42 percent from a year ago.
Gasoline prices have eased somewhat in recent weeks while diesel has remained chronically high, with American refineries operating near capacity.
Unless prices ease, the ripple effects of high diesel fuel could worsen because the costs are deterring some truck companies from accepting jobs unless they can persuade their customers to bear the added cost of more expensive fuel, the AP report sets out.
“There will be more logistical shortages,” said Phil Verleger, a veteran energy economist. “Americans will find more empty shelves and higher prices.”
“If you’re a farmer, then your energy costs are higher, and therefore it’s costing more to produce grain, and that’s pushing the price of grain up, and that’s pushing the price of food up,” observed Matt Smith, lead oil analyst at Kpler, a research firm.
Even more than gasoline, elevated diesel prices are magnifying the costs of goods because the delivery cost has risen so much.
Consumer prices soared 9.1 percent in June compared with 12 months earlier, the government reported last week, and the overall link to fuel prices is evident.
High diesel costs elevate the prices of everyday goods, since the higher cost of transportation is often passed down to consumers. In turn, consumers restrain their spending habits at grocery and other retail stores, slashing demand and exacerbating an economic slowdown.
The cost for diesel fuel — used by farmers and truckers to supply Americans with products they need — is up 75 percent from last year. https://t.co/sv47ieBbXU
— Breitbart News (@BreitbartNews) May 24, 2022
Anyone expecting relief sooner rather than later will have to wait.
President Joe Biden has called on Congress and states to suspend their gasoline or diesel taxes for a few months to help alleviate pain for drivers, but Congress appears unwilling to enact a tax holiday.
Biden’s visit last week to Saudi Arabia was intended, in part, to encourage OPEC to produce more oil, which would mean more diesel fuel globally. No major deal was announced and the president left to return to the U.S. empty handed.