Record diesel prices stoke food inflation, transportation costs
Summary
Diesel prices in the U.S. have reached a record high, going over $6 per gallon for the first time. This increase is raising the cost of transporting goods and may soon cause higher prices for food and other products that depend on diesel fuel.Key Facts
- The national average price of diesel topped $6 per gallon, up 60% from a year ago.
- Diesel is important for many steps in the supply chain, so higher prices affect many products.
- Food companies like Kroger, Smithfield Foods, and Hormel Foods expect diesel costs to push food prices higher.
- Other companies such as Newell Brands face higher costs from diesel used for shipping and materials.
- Energy prices increased after President Trump’s conflict with Iran led to the closure of the Strait of Hormuz, a major shipping route.
- The Energy Information Administration expects diesel prices to stay higher in the coming years, with an average price of $4.40 per gallon by 2027.
- Gasoline prices also rose, reaching $4.30 per gallon, a $1.11 increase from last year.
- California may become the first state with average diesel prices above $8 per gallon.
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