Why Diesel Is Driving Up The Cost Of Everything

Diesel prices reached all-time highs in March of 2022. Gasoline prices may hit consumers directly, but diesel prices are driving up the costs of all kinds of goods. They are also hurting the trucking industry, which is dominated by small businesses.

Consumers notice spiking gasoline prices every time they drive to the pump. But energy industry analysts say the current spike in diesel prices is historic — and is pushing up the cost of all kinds of goods.

Diesel prices are hovering around all-time highs, forced upward by the same circumstances that have fueled gasoline’s rise.

“The price of diesel is probably the bigger headline here,” said Patrick De Haan, head of petroleum analysis for GasBuddy.

Nearly everything people buy is at some point freighted in a vehicle powered by a diesel engine. Ships and barges, trains, trucks and even some airplanes run on diesel fuel.

Diesel hit an all-time high of $5.135 on March 12, according to AAA. As of April 27, the price was only slightly lower at $5.093.

That increase is hitting consumer prices hard, says Moody’s Analytics chief economist Mark Zandi, who notes that diesel has had a significant factor in rising inflation.

It is also hitting truckers hard. Truckers who used to spend about $10,000 a week on fuel now are spending closer to $18,000 a week.

Freight industry analysts suspect the very fragmented and volatile trucking industry will likely experience another severe recession. Some are even calling it a “bloodbath.”

“We see when fuel surges as much as it has over the past couple of months, that’s usually when we see a lot of trucking bankruptcies follow,” said Craig Fuller, founder and CEO of Freightwaves, an industry data tracker.

That amounts to bad news for the nearly 2 million trucking companies in America, the vast majority of which are small businesses with just a handful of trucks.

“These small operators that live essentially on the cash flow of their trucking operations are not prepared and don’t have the balance sheets or the cash position to absorb these instantaneous shocks to their cash flow,” Fuller said.

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Why Diesel Is Driving Up The Cost Of Everything

[RobertTeague]

I drive a diesel truck, the price was skyrocketing well before Russia / Ukraine.

[afluffypinecone]

Don't blame Russia for the increase in gas prices. The price of diesel was already increasing long before Russia invaded Ukraine.

[evana]

The consumer is being told that the price of diesel will raise the cost of everything. But as a trucker I can tell you that loads are being hauled for the cheapest they have been in years. As fuel prices raised the amount that I was being paid to move freight was cut by 50 percent.

[susanrolls]

The whole game is rigged against the small Mom and Pop business. I feel for these individual truckers trying to make it. Thank you for what you do.

[timothyhorton]

Prices are going up on everything except for the pay on the load, it's going down dramatically. So tell me again how diesel is causing everything to go up.

[hworkmaniv]

Diesel is expensive because politicians have constantly increased taxes on the fuel because so much of it is sold for transportation and logistics it was an easy target to generate additional tax revenue. So if everything is getting expensive because of fuel prices and politicians have not chosen to halt the taxes then blame the politicians that have done nothing.

The reason they are doing nothing is also because that would go against supporting the green agenda. Expensive fuel means people will start to consider purchasing electric vehicles.

[xFinesserx]

I’m a trucker and it’s getting ridiculous out here. Diesel just went up 60/cents over night to about $5.60/per gallon average. It’s hard to even find a load paying $3/mile now. The average truck gets 5-8 mpg…..you do the math

[JCElzinga]

Fact, we were in a state of massive inflation before ukraine... u cant just print new money and not have an inflation problem.

[ChristopherGilmore]

The worst part is, current, newer diesels produce LESS pollutants and emissions than any gasoline vehicle. I'm not a fan of DEF, DPF and EGR systems, but they make the exhaust so much cleaner. Yet, diesel is still demonized by so many.

[JohnDoe-qzqi]

Diesel is 10 dollars per gallon here in Sweden. The Government is forcing the gas companies to mix diesel with biodiesel. A large proportion of cars here run on diesel. Including mine.

[MB-idun]

What I'm spending on diesel weekly is more than what I make as owner operator weekly. Still the load pay sucks so brokers are the ones profiting more than shippers nor the carriers.

[williammurray]

Because diesel moves everything. It is cheaper to blend but more heavily taxed. Policies that artificially raise energy and labor costs equals inflation.

[safetrucker]

I’m limited to the work I can do for our country due to these prices and people aren’t trying to compensate for the inflation so deliveries are near impossible. Good luck my fellow motorist ! Be safe and blessed !

[Reddog]

Remember when we had to start exporting oil because we had too much, this diesel shortage is a move by the oil companies to pick your pockets, if you don’t believe check there profits

[jonplay]

I'm a truck driver and I can tell you that as these fuel prices are going up we aren't seeing any more money in the form of higher rates so where is this extra money that's being charged because it's definitely not going to us

[SS-ugqy]

Yeah everything delivered using diesel trucks but rates for freight lower than they were last year even though diesel prices are super high. Ask any truck driver they will tell u. Companies who sell the products are using this excuse how its costing them more to deliver are lying, it’s just to fatten their pockets while they can.

[cristitanase]

Energy costs are included in all prices in all economies. If they go up, everything gets expensive. There is absolutely no escape from this.

[雨星莊]

History would remind us that gasoline price speared up exorbitantly during the wars among Middle East countries (Arab-Israel wars), and gasoline, not diesel, was linked for the price increases in the commodities. People were misguided that gasoline was to be more expensive because gasoline needs refinement from crude oil. People likewise do not understand the needs of military, aside from industrial, sectors for the convenience of diesel. People at that time were also sold to the procurement of gasoline fed vehicles. The next thing to wonder from this report is that, "Isn't Saudi Arabia the biggest producer of fossil fuel (crude oil)?"
If price of diesel shoots up due to the war between Russia and Ukraine, and mentioning that Russia was indeed the biggest producer of diesel, then it makes no sense to speculate the invasion of Russia to Ukraine, effecting price of diesel to shoot up and influence the increase in the prices of other commodities. If Ukraine has abundant resource of diesel, that would be an appropriate thinkering for Russia to invade Ukraine. Do you know, "Governments change, lies remain." This report seemingly 'twist' around, offerring a biased explanation for diesel tyo drive up prices. In fact, if the media is not up to par, and is not knowledgeable, but finds more opportunities to mumble any 'cause and effect'; and seemingly masterful of convincing people, then the media should prepare to celebrate in the coming (two) years for a domino effect of wars. (Why?) One unorthodox link of fuel (diesel) commodity to the Russia invasion of Ukraine thereafter affecting transportation (shipping and delivery services) around the globe, and both directly and indirectly affecting the availability of supply chain (eg, palm oil, soybean, etc) could but trigger further wars. (It is not about trade anymore, but rather, to get what you need, for survival). Is this what you like?

[windrider]

The fact is freight shipping cost is the same today as it was a year ago. The fuel surcharge to cover the cost of fule for shipping products has risen. But the per mile charge for shipping a product has dropped. Infact the volume of freight has dropped and many single truck owner operators aren't making anything. Some who outright own there rigs are parked because the payment for freight only covers cost. Look at the GDP for the last quarter, it's down %1.4. That's less freight volume now and with the future drop due to China shutdown, it's going to be ugly

[stupendouslife]

I am pumping diesel for my semi at retail gas stations, I am saving about $0.20 cents per gallon, compared to truck stops.
This is the catch: truck stops advertised prices cash and credit, i am a truck stop member i got cash price minus $0.14 cents discount using their services.
Example: $5.38 cash price minus $0.14 cents = $ 5.24 final price.
Retailers offers $5.05 per gallon, it is $0.33 cents savings per gallon plus points or $0.05 extra savings per gallon up to 50 gallons.