U.S. diesel prices hit a record high, reaching $6 a gallon, or about 4.8 shekels per liter, in a development that could complicate matters for Republicans ahead of the November midterm elections, CNBC reported. The surge comes amid rising global crude oil prices driven by the wars involving Iran and Ukraine.
According to data from the American Automobile Association, or AAA, diesel prices are up 63% from the same period last year. The nationwide average price of diesel, used mainly by trucks, ships and agricultural equipment, now stands at $6.0556 a gallon.
(Photo: AP)
Prices are even higher in California, the state with the largest agricultural industry in the United States, where diesel is selling for $7.98 a gallon.
Diesel prices have risen alongside a surge in crude oil prices following escalating tensions between the United States and Iran. On Friday, West Texas Intermediate crude crossed $100 a barrel for the first time since May, after rising 20% since the beginning of the month.
"Diesel is the real lifeblood of the economy even though consumers tend to pay more attention to retail gasoline prices," Bob McNally, president of Rapidan Energy, told CNBC.
CNBC noted that higher diesel prices are passed on to consumers through rising food prices and other consumer goods.
"Diesel prices at these levels will be a 'silent killer' for the economy," Patrick De Haan, head of petroleum analysis at GasBuddy, told CNBC.
Gasoline prices also hit a record this week for this time of year, reaching $4.15 a gallon after topping $5 a gallon in May.
According to De Haan, Americans are now spending about $700 million more per day on gasoline and diesel than they were a year ago.
The wars involving Iran and Ukraine have disrupted global supplies. Kyiv has attacked Russian refineries, forcing Moscow to ban diesel exports.
Traffic through the Strait of Hormuz has also been sharply reduced, while Iran and the Houthis in Yemen have struck refineries in the Persian Gulf.
According to Gary Simmons, chief operating officer at Valero, the wars in Ukraine and the Middle East have taken refineries with a combined capacity of about 5 million barrels a day offline.