Diesel Prices Reach Record High of Over $6 Per Gallon

The national average price of diesel fuel has reached a record high of over $6 per gallon, AAA reported on Friday. This represents a 60% increase from the same time last year. The rise in diesel prices is expected to have a ripple effect on the economy, with consumers likely to feel the impact through higher prices for goods and services.

Business executives are already warning about the potential consequences of the price increase. Greg Foran, CEO of grocery chain Kroger, said that the pressure to raise prices is likely to mount. Similarly, executives at pork producer Smithfield Foods and Hormel Foods have noted that the increase in diesel costs is beginning to impact their businesses. The effects of the price increase extend beyond the food industry, with companies like Newell Brands also feeling the impact of higher energy costs.

The latest Energy Information Administration outlook expects retail diesel prices to average $4.40 per gallon in 2027, an increase of 8.2% from the previous forecast. The average price of unleaded gasoline has also risen, increasing by $1.11 over the last year to $4.30 per gallon. According to GasBuddy analyst Patrick De Haan, 47 of the 50 states have experienced an increase in average diesel prices of more than $2 per gallon over the last year.

The economy is facing an extra $300 million in diesel costs every 24 hours, and California is poised to become the first state with average diesel prices above $8. Many gas stations in the state are already charging over $9 per gallon. The record high diesel prices are turning the energy shock into a broader cost shock for businesses and consumers.