The nationwide average price of diesel hit $6 per gallon Friday for the first time, an ominous record for the fuel that powers much of the U.S.economy.
The price was $6.05 as of Friday morning, according to data from motor club AAA.The national average price of regular gas was $4.29, up 15 cents since last week.Since the war with Iran began in late February, the nationwide average diesel price has soared by 60%.
“The cost of diesel gets into just about everything,” KPMG chief economist Diane Swonk said in a recent interview.“From running a farm ...[to the] cost of food, but also everything across the economy that’s shipped,” she said.
When diesel prices rise, everything “gets that extra fee tacked onto it.” Swonk predicted that the high cost of diesel will be an “inflationary problem” for months to come.Since late July, diesel prices have been rising higher and faster overall than the cost of regular unleaded gas.That’s because key refineries that produce it have been knocked offline or destroyed, both in Eastern Europe — where the Ukraine-Russia war still rages — and in the Middle East.
And while all forms of fossil fuels this year have been affected by the blockade of the Strait of the Hormuz, diesel differs somewhat from crude and unleaded gas because of the central role Russian refineries play in the global supply.Russia typically exports more diesel than any other country, save for the U.S.But damage to its refineries from Ukrainian drones forced the Kremlin to impose a sweeping diesel export ban in July that will remain at least through the end of September.“Consumers should be prepared to pay higher inflation for anything that requires being shipped,” Joseph Brusuelas, chief economist at the RSM management consulting firm, told NBC News.‘Economic carnage’Groceries are likely to be especially sensitive to higher diesel prices, Brusuelas said, in part because many supermarkets are already operating on razor-thin margins ow...