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US Diesel Prices Hit Record High, Straining Logging Industry
Confirmed
In Short: Diesel prices in the US have reached a new all-time high, hitting over $6 per gallon, putting significant pressure on household budgets and the logging industry.
Diesel prices in the US have reached a new all-time high, hitting over $6 per gallon, putting significant pressure on household budgets and the logging industry. According to official figures, gasoline prices rose 3.9% last month alone, accounting for more than a third of inflation overall. The spike in fuel prices has been driven by higher global oil prices, caused by supply disruptions as a result of the US-Iran war, as reported by the BBC.
The war in Iran has caused prices for gas, diesel, and jet fuel to surge, with American consumers paying over $100 billion more since the war began, according to Mark Zandi, chief economist at Moody's Analytics. 'Higher oil prices and energy more broadly' have been the main economic consequence of the Iran war felt by U.S. households, Zandi told Fox Business.
American consumers have spent about $115 billion more this year due to the rise in energy prices amid the Iran war, Zandi said. The war's impact has hit lower- and middle-income American households the hardest. 'For lower- and middle-income Americans, it's tough, much more difficult. Their incomes on an after-inflation basis because of the war have come to a virtual standstill, and some are actually declining,' Zandi explained.
Households were better able to deal with higher gas prices earlier this year after larger tax refunds, though their effect has diminished over time. 'Ultimately, we'll figure it out. The oil that doesn't go through the strait will find other ways to get into the global marketplace, pipelines and other things. And we'll see more production in the rest of the world because you can make a lot of money now producing because prices are so high,' Zandi said.
While oil prices would likely start to decline when there's an indication that supplies are normalizing, Zandi cautioned they're unlikely to return to pre-war levels in the foreseeable future, in part due to the drawdown of reserves. The war's economic impact is not just limited to fuel prices but also affects the cost of transporting goods, which can be passed down to consumers through steeper prices for food and other staples, pushing up the overall cost of living.
What's confirmed
- Diesel prices in the US have reached a new all-time high, hitting over $6 per gallon, putting significant pressure on household budgets and the logging industry. According to official figures, gasoline prices rose 3.9% last month alone, accounting for more than a third of inflation overall. The spike in fuel prices has been driven by higher global oil prices, caused by supply disruptions as a result of the US-Iran war, as reported by the BBC.
- The war in Iran has caused prices for gas, diesel, and jet fuel to surge, with American consumers paying over $100 billion more since the war began, according to Mark Zandi, chief economist at Moody's Analytics. 'Higher oil prices and energy more broadly' have been the main economic consequence of the Iran war felt by U.S. households, Zandi told Fox Business.
- American consumers have spent about $115 billion more this year due to the rise in energy prices amid the Iran war, Zandi said. The war's impact has hit lower- and middle-income American households the hardest. 'For lower- and middle-income Americans, it's tough, much more difficult. Their incomes on an after-inflation basis because of the war have come to a virtual standstill, and some are actually declining,' Zandi explained.
- Households were better able to deal with higher gas prices earlier this year after larger tax refunds, though their effect has diminished over time. 'Ultimately, we'll figure it out. The oil that doesn't go through the strait will find other ways to get into the global marketplace, pipelines and other things. And we'll see more production in the rest of the world because you can make a lot of money now producing because prices are so high,' Zandi said.
- While oil prices would likely start to decline when there's an indication that supplies are normalizing, Zandi cautioned they're unlikely to return to pre-war levels in the foreseeable future, in part due to the drawdown of reserves. The war's economic impact is not just limited to fuel prices but also affects the cost of transporting goods, which can be passed down to consumers through steeper prices for food and other staples, pushing up the overall cost of living.
What's still developing
- It comes ahead of the Federal Reserve making its latest interest rate decision next week, with growing expectations they will be increased in a bid to slow the rate at which prices are rising.