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US Diesel Prices Reach $6 a Gallon, Straining Hauling Industry
Confirmed
In Short: Diesel prices in the U.S. have soared past $6 a gallon, impacting industries that rely heavily on diesel fuel, such as logging.
Diesel prices in the U.S. have reached an all-time high of over $6 a gallon, according to reports. This surge is particularly challenging for industries that depend on diesel, such as logging, where rising fuel costs are eroding profitability. Scott Dane, Executive Director of the American Loggers Council, joined Stuart Varney on 'Varney & Co.' to discuss the impact of these higher diesel prices.
The American Loggers Council has raised the issue with the administration, calling for steps to ease diesel costs, including suspending the federal diesel fuel tax and halting diesel exports. 'On our end, prices have remained flat. We're getting paid no more today than we were getting paid 10 years ago, roughly speaking,' said Dane. The industry's dependence on diesel has made the surge especially difficult to absorb, with the cost of filling a logging truck now a significant portion of operating expenses.
Higher diesel prices are also pushing up the overall cost of living, as they can be passed down to consumers through steeper prices for food and other staples. According to the Bureau of Labor Statistics (BLS), gasoline prices rose 3.9% last month alone, accounting for more than a third of inflation overall. This comes ahead of the Federal Reserve making its latest interest rate decision next week, with growing expectations that they will be increased to slow the rate at which prices are rising.
Jamie Hagen, president of Hell Bent Xpress, a family-owned trucking company in South Dakota, told the BBC's World Business Report podcast that higher oil prices were hurting his business. 'I've already invested in new equipment. We thought the economy was gonna start humming and now everybody's paused. Like someone turned the faucet off,' he said. The spike in fuel prices has been driven by higher global oil prices, caused by supply disruptions as a result of the ongoing US-Iran war.
As wages fail to keep up with the rising cost of living, the strain on household budgets is becoming increasingly apparent. Real average hourly earnings fell by 0.3% over the past year, according to official figures. The cost of diesel has risen by 3.4% in the year to August, with the average price hitting a new all-time high of more than $6 on Friday. This trend is expected to continue, with increasing expectations that interest rates will be hiked given the current inflation picture and the strong jobs market.
What's confirmed
- Diesel prices in the U.S. have reached an all-time high of over $6 a gallon, according to reports. This surge is particularly challenging for industries that depend on diesel, such as logging, where rising fuel costs are eroding profitability. Scott Dane, Executive Director of the American Loggers Council, joined Stuart Varney on 'Varney & Co.' to discuss the impact of these higher diesel prices.
- The American Loggers Council has raised the issue with the administration, calling for steps to ease diesel costs, including suspending the federal diesel fuel tax and halting diesel exports. 'On our end, prices have remained flat. We're getting paid no more today than we were getting paid 10 years ago, roughly speaking,' said Dane. The industry's dependence on diesel has made the surge especially difficult to absorb, with the cost of filling a logging truck now a significant portion of operating expenses.
- Higher diesel prices are also pushing up the overall cost of living, as they can be passed down to consumers through steeper prices for food and other staples. According to the Bureau of Labor Statistics (BLS), gasoline prices rose 3.9% last month alone, accounting for more than a third of inflation overall. This comes ahead of the Federal Reserve making its latest interest rate decision next week, with growing expectations that they will be increased to slow the rate at which prices are rising.
- Jamie Hagen, president of Hell Bent Xpress, a family-owned trucking company in South Dakota, told the BBC's World Business Report podcast that higher oil prices were hurting his business. 'I've already invested in new equipment. We thought the economy was gonna start humming and now everybody's paused. Like someone turned the faucet off,' he said. The spike in fuel prices has been driven by higher global oil prices, caused by supply disruptions as a result of the ongoing US-Iran war.
- As wages fail to keep up with the rising cost of living, the strain on household budgets is becoming increasingly apparent. Real average hourly earnings fell by 0.3% over the past year, according to official figures. The cost of diesel has risen by 3.4% in the year to August, with the average price hitting a new all-time high of more than $6 on Friday. This trend is expected to continue, with increasing expectations that interest rates will be hiked given the current inflation picture and the strong jobs market.
What's still developing
- Energy Information Administration (EIA) released on Thursday.
- The most recent figures showed that average daily gasoline production fell to 9.3 million barrels.
- Distillate inventories are now 13% below the five-year average.
- As well as directly driving up costs at the pumps, higher oil prices can also make transporting goods more expensive.