Diesel prices hit a new record on Thursday and are expected to rise significantly along with gasoline prices. These developments are due to the supply constraints caused by the Iran war led by President Donald Trump.
Price Increases
According to provided information, the average price of diesel has reached $6.40 per gallon, which is a 9-cent increase from Wednesday and shows a 73 percent increase compared to last year. Additionally, the average price of regular gasoline also increased by 7 cents last night, reaching $4.44 per gallon, which is a 39 percent increase from a year ago. This price approaches the record of $5.02 set in June 2022.
Read more: Increased Additional Costs in Home Purchases in the United States
Future Predictions
Patrick De Haan, Head of Oil Analysis at the price tracking website GasBuddy, announced on Thursday that New Jersey and Maine have set new records in diesel prices, and now 44 states have diesel prices at their highest historical levels. Only Connecticut, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont have had higher prices in the past.
Tom Kloza, Senior Energy Consultant at Gulf Oil, also predicted that "significant increases at the pump for gasoline and diesel" are expected. He noted that fuel margins have yet to align with previous major increases and emphasized large increases in the Great Lakes and Rocky Mountain states.
Liz Thomas, Senior Market Strategist at SoFi, also predicted that "diesel prices may reach $6.65 per gallon by Election Day," and with the intensification of trends, this prediction may come closer to reality.
Economic Implications
Diesel is vital for the U.S. economy as it powers the trucks, trains, and ships that deliver most consumer goods, including food and other household essentials. In a speech in North Carolina, Trump acknowledged that fuel prices have gone "a bit higher," but referred to it as a reasonable cost for his war against Iran, which has now entered its seventh month. He said, "This price is very cheap for what we have done."
Fuel-related costs can account for up to 30 percent of the total cost of some food items, and a continuous 10 to 15 percent increase in fuel prices could raise retail food prices by 2 to 4 percent. According to the Bureau of Labor Statistics, food costs at home increased by 2.2 percent last month compared to last year.
Read more: Costco Doubled the Price of Kirkland Motor Oil · Inflation Rate in America Remained Stable; Diesel Price Exceeded $6
Source: independent.co.uk
