High diesel prices are driving up the cost of most goods, from groceries to Amazon orders and furniture, as nearly everything that is delivered, whether by truck, rail or ship, uses diesel fuel.
High gasoline prices have eased somewhat in recent weeks. But diesel has remained chronically high, with American refineries operating near capacity. Unless prices ease, the ripple effects of high diesel fuel could worsen because the costs are deterring some truck companies from accepting jobs unless they can persuade their customers to pay more for fuel.
“If you’re a farmer, then your energy costs are higher, and therefore it’s costing more to produce grain, and that’s pushing the price of grain up, and that’s pushing the price of food up,” said Smith, the analyst at Kpler. And within the United States, refineries that produce diesel from crude oil are essentially maxed out. The nation has 11 fewer refineries operating today than before the pandemic, according to the American Petroleum Institute. One refinery that had served the East Coast closed after an explosion in 2019 and never re-opened. And some refineries in California are closed for retrofitting to process renewable fuel.
“The important thing," she said,"is to make sure that our allies, together with OPEC, don’t decrease any flows to the market at any junction, especially if we have some kind of disruption.” She also monitors where her drivers are buying fuel to make sure they're making wise decisions. And she tries to absorb the higher fuel costs herself as much as possible.
Cargo Transporters, which runs 470 trucks and 1,800 trailers, raised its rates, too, and has been turning down some jobs to Florida, where trucks often must return without a load, said Shawn Brown, a company executive. When there's no cargo on a truck, no one pays the trucking company. But the driver still has to be paid, and fuel is still burned.
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