The low U.S. and global diesel supply may push costs higher and exacerbate the inflation already causing Americans hardship, according to a report from the Hill published Sunday.
“The national numbers for distillates are pretty tight,” explained Patrick De Haan, who is the head of petroleum analysis for GasBuddy.
However, the issue does not mean there would be widespread outages “but if we get a bout of cold weather, things could be challenging,” he added.
Farmers and truckers rely on diesel fuel to supply the nation with basic needs, and its price jumped significantly over the summer due to inflation, Breitbart News reported in July.
WASHINGTON, DC – AUGUST 16: U.S. President Joe Biden (C) gives Sen. Joe Manchin (D-WV) (L) the pen he used to sign The Inflation Reduction Act with Senate Majority Leader Charles Schumer (D-NY) and House Majority Whip James Clyburn (D-SC) in the State Dining Room of the White House August 16, 2022 in Washington, DC. The $737 billion bill focuses on climate change, lower health care costs and creating clean energy jobs by enacting a 15% corporate minimum tax, a 1-percent fee on stock buybacks and enhancing IRS enforcement. (Photo by Drew Angerer/Getty Images)
“High diesel costs elevate the prices of everyday goods, since the higher cost of transportation is often passed down to consumers. In turn, consumers restrain their spending habits at grocery and other retail stores, slashing demand and exacerbating an economic slowdown,” the outlet said.
In addition, farmers warned in June that high diesel prices could result in food shortages.
Now, analysts believe several factors are converging as colder weather means a rising demand for diesel fuel, according to the Hill.
The nation reportedly has approximately 25 days worth of it left when, per De Haan, usually the supply was nearer the “low to mid 30s” when it came to the number of days.
There are several factors causing the strain in the diesel markets and some had to do with the coronavirus pandemic and recovery, according to Debnil Chowdhury, who leads the North and Latin American refining and marketing research at S&P Global Commodity Insights.
“Diesel demand came back a lot faster than other products. There are refineries that shut down across the globe so the ability to supply was hindered,” he explained, adding, “And then finally, China, which is a larger diesel exporter … wasn’t able to export.”
Meanwhile, half of American voters say the economy or inflation is their main area of concern as the November 8 midterm elections approach, per an ABC/Ipsos poll.
“Inflation has become a major headache for Americans as prices have soared by 8.2 percent since last year, with grocery prices surging by 13 percent and gas prices climbing by 18.2 percent,” Breitbart News reported.
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