For all the talk of the supply chain issues that have riled the US economy since the beginning of the COVID-19 pandemic, there is another factor that’s contributing to the high prices that are confronting consumers at nearly every retail outlet: the cost of diesel fuel is at a record high.
This surge in pricing – caused by high crude oil prices and decreasing domestic production of diesel fuel – is set to cause further angst across many segments of the economy:
- Truckers of every stripe – from those driving tractor trailers across America’s highways to the smaller trucks filling grocery shelves – will have to pay more for fuel, and will in turn charge more for their services.
- Diesel fuel also powers the locomotives that carry cargo on the rails and the container ships that sail the high seas – and again, railroad companies and shippers will pass these costs on to consumers.
- The construction industry relies on diesel fuel in myriad ways – from the generators that power equipment during a home remodel to the bulldozers, loaders, and other vehicles used in infrastructure projects. Construction professionals will have to figure these increased costs into the bids they submit.
Sadly, there does not appear to be serious price relief on the horizon. Winter is expected to continue for at least another month in the US, and any serious storm can affect refinery outputs, thus making it difficult for US producers to increase domestic supplies. Even more seriously, global uncertainties – of war in the Ukraine, for instance – have pushed petroleum prices to nearly $100 a barrel, and efforts to increase production (and lower prices) have remained modest.
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