Five-dollar diesel isn't just a headache for truckers—it's a fresh problem for inflation. The average price of a gallon of diesel hit $5.07 on Wednesday, AAA reports, up from $3.65 a month ago. That's a jump of about 39%, outpacing the recent surge in regular gas, which now hovers at about $3.80 per gallon, per Axios, which notes that the Iran conflict has "choked off" supplies of Gulf oil and other commodities, especially since the Strait of Hormuz, a major shipping path, has been effectively shut down. GasBuddy's Patrick De Haan says it's only the second time ever that the price of diesel has shot past $5, the last time being in 2022 after Russia stormed Ukraine, per the Hill.
Most drivers don't fill up with diesel, but they do buy what it moves: food, furniture, building materials, and much else that travels by truck, train, or ship. Those higher transport costs won't translate into instant sticker shocks, but they're expected to filter into prices over the coming weeks, especially for heavy, low-margin items where shipping is a big chunk of the bill. And, "until we see a meaningful resumption of oil flows through the Strait of Hormuz, upward pressure on fuel prices is likely to persist," De Haan wrote in a Monday note, per CNBC.
Users of heating oil, largely in the Northeast, may catch a break as winter ends, but the broader economy may not, per Axios. Because diesel is woven into the cost of almost everything, the spike threatens to push core inflation higher, not just propel fuel prices into the headlines. That makes it harder for the Federal Reserve to ignore, complicating its decisions on how aggressively to fight inflation as supply chains and tariffs are already putting pressure on prices.
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