Man, this $5.00/gallon diesel fuel hurts. And rates below $3.00 for vans are aggravating the wounds. Craig Fuller, FreightWaves Founder and CEO, wrote an article about the importance of diesel fuel in our daily lives. From hauling food, goods, and medical supplies to powering the electrical grid, diesel is a necessary fuel for everyday living. Without diesel, trucks, trains and ships cannot travel the vast distances to deliver the necessities. Yes, there are more environmentally friendly power sources, but they are not there yet. Elon promised the Tesla truck in ‘17, but only 20 have been produced to date, mainly the sales prototypes.
Diesel is used in just about every industry in some fashion. Either to haul materials or used in production either as a fuel source or component. Trucks, trains and barges haul along our roads, rivers and rails. Farmers use diesel for their tractors and irrigation systems. The construction industry uses it for heavy equipment. The mining sector uses a good deal of fuel also. Cummins had an estimate of 30 gallons an hour in this article.
Diesel is vital to the global economy. One could call it a “lifeblood.” The push by politicians to renewable energy and the Russia-Ukraine war are causing shockwaves in fuel prices. Diesel fuel has nearly doubled in the last three months. Some stations in Pennsylvania posted prices for diesel that were over $6.00/gallon this weekend.
The increase in diesel fuel is also causing the prices of food, materials, and services to increase. Consumers have had to change spending habits and watch their disposable income closer. If payrolls shrink due to paying more for fuel, this could lead to some demand destruction and hurt the economy more than it already has.