US Diesel Hits Record $6.53, up 77% Year over Year
Diesel prices hit a fresh record high, rising 77% year over year. Analysts warn this will raise costs for food and goods.
Key points
- US diesel prices hit a record high of $6.53 per gallon on Tuesday.
- The current price is 77% higher than the same day last year.
- Economists warn that rising diesel costs will increase prices for food and goods.
The national average for diesel fuel reached a record high of $6.53 per gallon on Tuesday. This figure is 77% higher than the price recorded on the same day last year.
Renewed fighting between the U.S. and Iran intensified supply chain disruptions. AAA data shows the price has set new records every day for the last two weeks.
Diesel Drives Most Industrial Transport
Gasoline moves people, but diesel powers the trucks and farm equipment that move goods. Patrick DeHaan of GasBuddy noted that this cost is now funneling into the broader economy.
Jeffrey Currie, an economist, stated that diesel is the cost base for every container and tractor. He added that the pass-through to producer prices is barely getting started.
Inflation Risk Rises in Supply Chains
Transportation costs are passed down the supply chain to final consumers. Economists warn that rising fuel prices will stoke inflation in the short term.
Inflation has run above the Federal Reserve’s 2% annual target for more than five years. The current surge threatens to add further pressure to already high consumer prices.
Historical Context of Energy Shocks
The current price surpassed the previous record set in 2022 after Russia’s invasion of Ukraine. According to Investopedia, these disruptions continue to drive up energy costs significantly.
Metals are dug up with diesel-powered machines, and food is harvested with diesel tractors. The high cost of fuel directly impacts the production of almost every commodity.
