The United States continues to grapple with elevated gasoline prices at the pump, but experts caution that the rising cost of diesel fuel may have a more profound impact on consumers in the long run.
Diesel: The Economy's Backbone
“It’s diesel that really runs the economy, and kind of runs the world,” said Joe DeLaura, a global energy strategist at Rabobank, in an interview with The New York Times. Since the onset of the Iran war on February 28, the average price of a gallon of diesel has climbed by approximately 45 percent, while regular gasoline has seen a 35 percent increase per gallon. According to the Energy Information Administration, diesel prices are projected to peak at $5.80 per gallon this month, compared to gasoline averaging $4.30.
Why Diesel Matters More
While gasoline prices are more visible to daily commuters, diesel—which contains more energy per gallon—powers the transportation industry, including trucks, tractors, and heavy machinery. This makes diesel critical for moving goods and supporting agriculture. Despite a ceasefire extension in the Middle East by President Donald Trump earlier this week, oil prices remain around $100 a barrel after Iran seized two container ships in the Strait of Hormuz, and peace talks remain deadlocked.
Refining and Supply Challenges
The refining process for diesel is more intensive and costly than for gasoline, and supplies were already constrained before the conflict began. Refineries cannot easily adjust their diesel output. Additionally, Persian Gulf countries and China, major diesel producers, have slashed exports to avoid domestic shortages, as reported by The New York Times. “This is why diesel more than doubles, while gasoline basically moves up in tandem with crude,” DeLaura explained. “You have a shortage of diesel, you have a shortage of jet fuel, you have a shortage of fuel oil. Gasoline is relatively well supplied.”
Impact on Essential Sectors
Unlike regular consumers who can reduce gasoline consumption by carpooling or using public transit, farmers and truckers depend on their vehicles and machinery for their livelihoods and cannot easily cut back. Even if the Strait of Hormuz is fully reopened, diesel prices may not fall as quickly as other fuels due to the time required to restore distribution networks.
