As an Amazon Associate we earn from qualifying purchases
The national average price for a gallon of diesel climbed to $6.45 on Friday according to AAA’s diesel price tracker, another record in a run of them that has redrawn the cost of moving almost everything in the American economy. Unfortunately for consumers, it really shows no signs of slowing down.
The climb has been relentless. Diesel first broke the June 2022 record of $5.82 on September 4, when it reached $5.85. A week later it passed $6.06, and it has added roughly forty cents since.
The driver is crude. Before the U.S. and Israel launched their war against Iran in late February (excellent analysis of the war situation here), diesel averaged about $3.76 a gallon. Prices rose quickly as crude costs soared amid supply chain disruptions and production cuts across the Middle East, with most tanker traffic bottlenecked in the Strait of Hormuz. Reduced refining capacity abroad and tight global inventories have compounded the squeeze.
Domestic problems are adding to it. Exxon Mobil’s 275,000-barrel-per-day refinery in Joliet, Illinois, shut down this week after power failures and flooding, raising the risk of tighter supply across Illinois, Indiana, Ohio, Wisconsin and Michigan.
Regional spreads are extreme. California drivers paid $8.40 a gallon Friday (Bay Area stations are pushing $9), with Washington and Hawaii both above $7. Texas was cheapest at $5.98 as one of only two states, with Oklahoma, still under $6.
Because diesel powers freight, rail, farm equipment and delivery fleets, the cost lands well beyond the pump. Some businesses have already passed it along as added fees on online orders and shipped packages, and perishable goods like meat and produce face the most immediate strain. The Labor Department reported that more than a third of August’s jump in producer goods prices traced to diesel, which rose 24.1% in the month.
John is the current Editor-in-Chief for The Bay City Beacon. His experience spans nearly 20 years of political reporting across several publications.
