Diesel just notched a painful first: an average price above $6 a gallon nationwide. US truckers and farmers are now paying about 63% more than a year ago, according to AAA data, with diesel at $6.06 per gallon on average and close to $8 in California, the country's largest agricultural state. Analysts warn the spike, driven by war-related disruptions in Iran and Russia, with crude prices topping $100 a barrel, is likely to ripple through nearly everything Americans buy, CNBC reports. The average price hit a record high of $5.85 last Friday and has continued to rise. The average was $ 3.70 this time last year.
Diesel powers freight trucks, trains, ships, farm equipment, and, in some cases, home heating and electricity, making it what one energy analyst calls "the more insidious, more costly, and more impactful fuel." Another warns that prices at these levels are a "silent killer" for the economy, and an "enormous challenge" for the Trump administration. Analysts say the world has lost around 8% of its diesel supply due to conflicts, and American refineries are already running at around 98% utilization rates, meaning there's no spare capacity.
- Experts say consumers are likely to see steeper price rises the longer diesel remains expensive. "Early on, much of the cost increase gets absorbed along the supply chain through existing freight contracts and retailer margins," David Ortega, a professor of food economics and policy at Michigan State University, tells the AP. "But as contracts reprice and fuel surcharges take hold, more of that cost makes its way to the grocery store."
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