The price of diesel has skyrocketed in recent months — much more even than regular gasoline — especially after Russia invaded Ukraine in February
“People pay less attention to diesel prices because people aren’t going to the pump and using it,” said Matt Smith, lead oil analyst at Kpler, a research firm. “But diesel has a more far-reaching impact and is already having a real big impact across the economy.”
One reason why diesel prices haven’t yet declined as gasoline has is that OPEC nations have slowed their supply of oil, and Middle East oil typically produces more diesel fuel than, say, parts of Texas do. Another factor is that China has reduced its diesel exports, presumably to help achieve its net-zero greenhouse gas emissions goals.
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.
The high cost of diesel is especially a problem for farmers — with a trickle-down cost for consumers, as high diesel prices mean growing and harvesting crops costs more.
According to one California farmer, quality might suffer as well.
“The good stuff’s going to go away because everybody is looking to cut their corners,” Chris Torres, of F&L Farms Trucking Inc., said.
The price of diesel has trucking companies charging more to cover their costs, triggering higher bills all along the supply chain.
According to AAA, the current average price of diesel is $5.50 a gallon, over two dollars more than a year ago. In California, the current average is $6.64.
By comparison, a gallon of regular gasoline is averaging $4.47, up 41% from a year ago.
“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,” Smith said.
Since crops are seasonal, most farmers are working the fields regardless. And because they need heavy machinery, most farmers have little choice.
Bill Zittel, of the farm Amos Zittel & Sons, said his tractor can use about five gallons of diesel fuel an hour.
“It’s not by miles like you would by car,” Zittel said, “a tractor is by hours, so if that tractor’s been running for eight hours, you’re going to use forty gallons.”
Extreme heat and drought are also driving up grocery tabs when it comes to produce. And the situation isn’t expected to improve anytime soon.
“The price goes up a lot faster than we can get the charges out of the commodities and the companies that we’re doing the work for,” Torres said. “If it goes up like a rocket, it comes down like a parachute.”
The Associated Press contributed to this report.