The national average price for diesel fuel in the United States topped $6 per gallon for the first time this Thursday, adding to already considerable pain at the pump ahead of the November midterm elections.
The data comes from GasBuddy, which said in a statement that “As diesel climbs, higher supply chain costs work their way into the price of groceries, household goods, deliveries, and countless other products families rely on every day, even for households that never fuel a diesel vehicle.” Diesel prices in the U.S. are $2.30 higher than they were a year ago.
The company’s head of petroleum analysis, Patrick De Haan, said, “Not every day are new all-time records set, and this will be a particularly painful one for the economy that may not even be immediately felt, but record diesel prices will impact every cargo, shipment, every delivery Americans are taking, and are likely to reignite inflation up and down the supply chain.”
The diesel price surge also comes at a time when demand for the fuel picks up seasonally—while refineries enter seasonal maintenance. All this will add to inflationary pressures, not only in the United States but around the world since the diesel price rise is not an isolated trend in the U.S. In Europe, diesel prices have soared above 2 euros per liter, prompting national governments in the EU to extend financial relief for drivers in an attempt to cushion the blow.
Actual relief in diesel supply is not coming anytime soon. The war in the Middle East is escalating, and Ukrainian drone attacks on Russian refineries continue, paralyzing a solid portion of global fuel supply. The rest of the world does not have enough refining capacity to cover the losses from the Gulf and Russia, which means supply will continue to be tight and will likely even get tighter.
By Irina Slav for Oilprice.com
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