Everyone is worried about gas prices, but diesel is driving inflation more than you think. The price of diesel effects everyone whether you own a car or not. Even before Russia invaded Ukraine, diesel fuel was in short supply due to a drop in global refining capacity.

Now some analysts say there could be spot shortages of diesel fuel and prices may stay elevated, even if oil and gasoline decline. Those higher diesel fuel prices are also stoking inflation.
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When diesel prices increase more than gasoline prices, this leads to supply concerns. For a truck that fuels up with 125 gallons or more, that several hundred dollars extra at every filling can result in higher costs for anyone who buys anything that gets shipped, from food to home goods to automobiles.
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Gas and diesel fuel prices have reached record prices in the last few weeks. In recent weeks, the trucking industry has noted a worrisome decline in diesel inventories in the Northeast (below 20M barrels), as well as on-the-ground reports of supply issues, resulting from a lack of supply. Diesel prices hit a record average high of $5.58 per gallon last Wednesday, according to AAA. This marks a 75% increase from a year ago.

Diesel is essential for the U.S economy, powering farms and the construction sector along with the trucks, trains and boats that help move goods. Rising diesel prices will drive up inflation, which has hit 40-year highs. The impact literally effects everyone even if you don’t own a car.

Why High Diesel Prices Are So Critical

The White House is considering tapping the Northeast Home Heating Oil Reserve, created in 2000 to help with supply issues and used only once in 2012 in the wake of Hurricane Sandy. The impact from such a release would be limited by the relatively small size of the reserve, which only contains 1 million barrels of diesel.

When diesel prices increase more than gasoline prices, this leads to supply concerns. For a truck that fuels up with 125 gallons or more, that several hundred dollars extra at every filling can result in higher costs for anyone who buys anything that gets shipped, from food to home goods to automobiles.

The impact is literally effecting every aspect of our lives and out economy. Diesel is used in farming. It’s used in a lot of industrial machine processes. All machinery runs on diesel. A lot of construction runs on diesel. Trucks run on diesel, trains run on diesel, and planes run on jet fuel, which is also diesel. Heating oil is also diesel fuel, and so is marine gasoil, which is form of diesel.

Diesel impacts the backbone of everything we do, whether it’s moving things around the world or harvesting or producing anything in a factory. Almost every human activity has some element of diesel consumption.

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Diesel is used in farming. It’s used in a lot of industrial machine processes. All machinery runs on diesel. A lot of construction runs on diesel. Trucks run on diesel, trains run on diesel, and planes run on jet fuel, which is also diesel. Heating oil is also diesel fuel, and so is marine gasoil, which is form of diesel.
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U.S. refiners have increased their operating rate to 92%, much higher than last year. Some refineries can also change the mix of fuels they produce, and could increase diesel production.

But there are more complicated issues impacting refining. Two of the U.S. refineries are in the process of transitioning to become biofuel facilities. Refineries in California, North Dakota, Wyoming and Newfoundland are among those that have been or are in the process of being repurposed to make renewable diesel and sustainable aviation fuels.

The Bottom Line

The world’s businesses runs on diesel. Diesel is at record highs and as high as it’s ever been relative to gasoline costs — and that’s impacting inflation in a meaningful way. It has negative consequences. High gas and diesel prices are not good for anyone.

President Biden seems to praise high gas prices as an "incredible transition" Americans must go through towards green energy. What do you think?

There is so much more to discuss on this, put your comments below and let’s start the conversation. I can be reached on all major social media channels via @laurenfix.

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Lauren Fix, The Car Coach®, is a nationally recognized automotive expert, media guest, journalist, author, keynote speaker and television host. A trusted car expert, Lauren provides an insider’s perspective on a wide range of automotive topics and safety issues for both the auto industry and consumers. Her analysis is honest and straightforward.

Lauren is the National Automotive Correspondent for Newsmax TV, a conservative news net carried in 23 countries and in over 35 million U.S. cable/satellite homes. She is also The Weather Channel and Inside Edition’s auto expert. Lauren Fix serves as a juror for the esteemed North American Car & Truck of the Year Awards (NACTOY).

Lauren is The Car Coach columnist for Parade Magazine and eBay Motors and writes a weekly column. She also appears weekly on USA Radio’s DayBreak USA.
Lauren is the president and founder of Automotive Aspects, Inc., a consulting firm with a wide range of multi-media services, including media consulting, broadcast messaging strategy, public relations and television production.

Lauren is the author of three books: most recently, Lauren Fix’s Guide To Loving Your Car with St. Martins Press, Driving Ambitions: A Complete Guide to Amateur Auto Racing, and The Performance Tire and Wheel Handbook.

Lauren’s broadcast experience includes Oprah, Live! With Regis and Kelly, The View, TODAY, 20/20, The Early Show, CNN, FOX News, FOX Business, MSNBC, HLN, TBS Makeover and a Movie, Inside Edition, ESPN, TBS, Discovery, Speed and NPR, to name a few. Lauren previously hosted four seasons of Talk 2 DIY Automotive on the Do-It-Yourself Network (DIY), was the National Automotive Correspondent for Time Warner Cable and hosted Female Driven on Lifetime TV.

Lauren’s articles and advice have appeared in USA Today, Good Housekeeping, Redbook, eBay, Woman’s World, Esquire, First for Women, InTouch and Self. She has also contributed content to Motor Trend, Truck Trend, Hot Rod, Car Craft and many other automotive publications.

Lauren is a member of the Society of Automotive Engineers (SAE), the Society of Automotive Analysts (SAA) and is an ASE (Automotive Service Excellence) certified technician. She inherited her love of all things automotive from her father, who owned a brake remanufacturing business and worked for many U.S. manufacturers. Lauren has been fixing, restoring and racing cars since the age of ten. She has been advising drivers almost all her life.

In addition to being a leader in positive consumer awareness and the automotive industry, Lauren is often asked to speak to groups around the world about her success in marketing, motivation, entrepreneurship, parenting and other lifestyle topics.

Lauren was named the 2015 WIN Award, 2013 SEMA Business Network “Mentor of The Year”; SEMA Business Network 2012 Woman of the Year; and awarded various Car Care Council “Automotive Communications Awards” in 2012, 2013 and 2014. Past awards include 2008 Automotive Woman Of The Year and 2010 Woman of Distinction – Entrepreneur winner. Lauren Fix was inducted into the National Women and Transportation Hall of Fame in 2009 – a very high honor for a hard working automotive professional.