Nationwide gas prices nearing a $4 average because of the war against Iran isn't good, and we're not going to pretend it is. But it's the cost of diesel that's going to hurt consumers the most, and its price is rocketing up at an even higher rate. The national average for a gallon of diesel is now nearly $1.50 more than gasoline, and it impacts everything in the country that moves or needs to move.
Diesel Is Climbing Higher, And Hurts Even More
In the last month, according to AAA, the price of a gallon of gas has climbed a dollar to reach an average of $3.99. Diesel, on the other hand, is up $1.65 in the last month, with the current price at $5.41 per gallon. While gas is still more than a dollar short of the record high set in 2022, diesel is only 40 cents away from its record high, and it is getting there in a hurry.
While gas moves people, diesel moves everything. There's an old adage: if you got it, a truck brought it. Diesel is used to power the trucks that drive freight from terminal to loading dock. Beyond that, it powers trains that take resources and crops to market. It powers the tractors that put food in the ground and take it back out. You see where we're going with this. Diesel is crucial to not just the economy, but to our well-being.
The US produces more diesel fuel in a year than it uses, but that doesn't make the country immune to price changes outside. If a refiner can sell the product elsewhere for more, it isn't going to sell it at home for less. According to the Energy Information Administration (EIA), in January around 40% of the cost of diesel was directly the price of crude. With crude nearly doubling in price since then, and markets in panic, prices keep climbing.
US airlines are warning of price hikes and surcharges. UPS has already raised its fuel surcharge by 25%, and freight costs are likely to follow.
Crops And Cargo Are About To Suffer
There are issues with where cargo enters the US that will drive costs. The two largest and three of the top 10 ports in the US for container landings are in California, where diesel is the most expensive in the country at $7.36 per gallon. New York and New Jersey, where there are more ports, have diesel running about $5.75.
Sources: AAA, DIA, JD Power, USDA
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This article originally appeared on CarBuzz and is republished here with permission.
