Diesel prices continue to break records this week, but no one is celebrating.
On May 6, the average cost for a gallon of diesel in America is $5.51. In many locations it is significantly higher than that.
And the price continues to rise, based on an analysis of data from AAA. The day before, the cost for a gallon of diesel was $5.47. And a week ago it was $5.18. A month ago, the cost was $5.07.
The cost of a gallon today is as much as $2.40 higher than it was a year ago. And there is little indication that this trend will reverse.
Ripple effect on businesses and consumers
The cost of a barrel of crude oil continues to hover around $100, leading to soaring prices at gas stations across the country. Some states are seeing higher diesel prices compared to the national average of $5.51. California, New York, Connecticut, Vermont and Rhode Island see prices for a gallon of diesel exceed the $6 threshold.
The trucking industry has also been hit hard as diesel prices hit an all-time high in the US, putting pressure on all industries. Diesel fuel is essential to the supply chain, where the current national average for a gallon of diesel fuel is $5.51 per gallon – an increase of more than $2.00 from this time last year. Higher diesel costs for truck drivers can ultimately affect bottom line. The impact is seen on delivery costs, retail and even supermarket prices.
The price of regular gas is also feeling the heat rising to $4.27 a gallon, from average gas prices a month ago was $4.16. This is in stark contrast to January prices, which were just under $3.50 a gallon. States such as Washington, Oregon, California and others are most affected as retail gas prices at the pump average between $4.51 and $5.78 per gallon. The rapid pace of fuel price increases is causing many Americans to ponder how to save money as gas prices continue to rise.
Increased demand, supply shocks lead to rising prices
Retail gas prices are primarily affected by crude oil prices, which are in turn affected by the level of gasoline supply relative to gasoline demand. Strong and increasing demand for gas in the United States and the rest of the world could put strong pressure on available supplies, causing prices to rise sharply. Total domestic gasoline inventories fell 2.2 million barrels to 228.6 million barrels last week, according to data from the Energy Information Administration.
This is compounded by the Russian invasion of Ukraine, which has prompted Western countries to boycott or cut Russian oil purchases, leading to further shortages in crude oil supplies. In April, the Biden administration announced that it would bring one million barrels a day to market over the next six months to address the supply disruptions caused by the war in Ukraine and the rise in fuel prices that put Americans at the pump. to face, to soften.
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