Diesel prices have reached record highs over the past week, threatening an already strained supply chain that relies heavily on fuel for trucking with prices that are almost double last year’s averages. The average cost of diesel fuel in the United States now stands at $5.37 per gallon, AAA says. Unlike gasoline prices, whose lunar trajectories have stabilized since their peak after Russia invaded Ukraine, diesel prices could continue to rise.
Truckers are already worried about rising and uncompensated costs that can drive small owner-operators out of business. Average retail diesel prices topped $5.00/gallon last week – the highest on record dating back to 2005 – and have risen more than 4% since. Prices have surged in recent days amid record futures and decades-low inventories, further straining consumers in the face of soaring inflation. Russia’s invasion of Ukraine has tightened global fuel supplies and led to fierce competition for diesel produced on the US Gulf Coast.
The expensive diesel will deal a blow to the already strained trucking sector, which consumes about 70% of all diesel used in the country and serves as a barometer of the US economy, according to the trucking association ATA. Diesel is also used in farm equipment that is currently powering the biggest corn and soybean planting season since 2017.
The shortage is more pronounced on the East Coast, where distillate stocks have fallen to their lowest since 1996, Bloomberg reports. Gulf Coast producers have ramped up exports to Latin America and Europe to make up for resources lost to embargoes on Russian oil production, leaving the national pipeline supplying states along the Atlantic coast under-served. used.