Truckers Feel the Squeeze of Inflated Diesel Prices at Gas Stations
The upward changes in fuel prices at gas stations seem to spin as fast as the numbers on a slot machine. While we wait for the numbers to rotate and find their way to a settled price, all we can do is continue to pay these higher prices. Most of us complain daily about the price of gasoline, but if you take notice, diesel prices are even worse.
What is the price of diesel fuel?
The national average price of a gallon of diesel fuel reached an all-time high of $5.557, according to CNBC. The price drivers pay varies per locale, but most gas stations show diesel costing quite a bit more than gasoline which is at a national average of $4.418 as of Thursday. This increased price for diesel shows a rise of 53 cents per gallon compared to last month.
What’s causing the increased fuel prices at gas stations?
Oil refineries report running at near full capacity as demand for fuel increases behind pre-pandemic levels. Unfortunately, the pandemic caused a lower demand for gas and diesel, which meant a much lower need for deliveries at stations around the country. This feeds directly into the supply and demand aspect of fuel. As the economy comes back to near normal, the demand has outgrown the supply of fuel.
Why is the Northeast quietly running out of diesel?
If the national average price of diesel isn’t enough to scare you, things are worse in the Northeast and along the East Coast of the United States. According to Freight Waves, the average price of a gallon of diesel is $5.90, which is an increase of 63% from the beginning of the year.
The reason for this increase is a shortage of supply. Typically, the East Coast stores nearly 62 million barrels of diesel, but the region is currently running at less than 52 million barrels. This, along with the reduction of refineries in the region from 18 to 9, creates a serious problem along the East Coast.
So far, many gas stations aren’t limiting the amount of diesel fuel a customer can receive, but they are monitoring when inventories run low.
Increased diesel prices at gas stations translate to higher prices for everyone
If you notice you can’t purchase as many groceries for the same amount of money as you could a few months ago, the increased diesel prices are directly to blame. Yahoo Finance shares the Bureau of Labor Statistics’ April Consumer Price Index shows an increase of 8.3%. This is a significant increase compared to the same month last year.
This index shows the increase across all goods purchased, but the cost of food specifically increased by 9.4%, and at-home grocery consumer goods rose 10.8%. This reflects the highest increase since 1980, according to the BLS reports.
Will we see lower prices at gas stations in the future?
The halt to the economy was a huge blow to nearly every industry, especially production and trucking companies. In order for gas and diesel prices to return to the national average prior to the pandemic-caused shortage, supplies need to be increased, which takes a lot of time and more refining of oil.
We might be facing increased fuel and grocery prices for a long time.