\n The price of diesel, the workhorse fuel that powers the world economy, topped $6 a gallon on Friday for the first time ever.\n <\/p>\n
\n The price point may be invisible to most American drivers, but will likely lead to higher costs for most things consumers buy.\n <\/p>\n
\n The national average is $6.06 a gallon, according to the latest reading from AAA, up 21 cents in just the last week. Last Friday, prices first broke the previous record of $5.82 a gallon set in June 2022 after Russia invaded Ukraine.\n <\/p>\n
\n Diesel costs have risen more than 55% since the start of the war with Iran, outpacing the 40% jump in gasoline prices. In fact, diesel is on track for easily the biggest annual percentage increase on record, according to a CNN review of AAA data.\n <\/p>\n
\n The problem is two-fold: First, oil futures have surged back above $100 a barrel as the US-Iran war drags on.\n <\/p>\n
\n Second, there aren\u2019t enough refineries operating to turn that crude into fuel.\n <\/p>\n
\n Refineries in the Middle East and Russia have been damaged by war. Russia, a major source of diesel, has limited its exports to fight fuel shortages at home. China, seeking to avoid shortages of its own, has also restricted its exports.\n <\/p>\n
\n \u201cRefiners have already been maximizing the production of diesel. We simply can\u2019t get any more diesel out of the system,\u201d said Andy Lipow, president of Lipow Oil Associates.\n <\/p>\n
\n Gasoline gets most of the attention when fuel prices rise. Only about 3% of passenger cars on American roads run on diesel. However, diesel powers nearly everything else \u2013 trucks, tractors, freight trains, boats and construction vehicles.\n <\/p>\n
\n Almost all heavy trucks and freight trains run on diesel, which transport virtually all the goods Americans buy for their homes. Major trucking companies and freight railroads pass on increased costs to their customers \u2013 like retailers and manufacturers \u2013 via a fuel surcharge. Those businesses may then raise prices to offset the costs.\n <\/p>\n
\n On the West Coast, where the average price for diesel in California stands at $7.98 a gallon, the nation\u2019s largest ports in Los Angeles and Long Beach are about to get a flood of containers for the holiday shopping season. Transporting them to retailers will cost more this year, which could be passed along to shoppers.\n <\/p>\n
\n Patrick De Haan, head of petroleum analysis at GasBuddy, said diesel could \u201cblow past\u201d $8 a gallon in California. \u201cSome pumps aren\u2019t even built to display what could come next,\u201d he said in a post<\/a> on X.\n <\/p>\n \n The spike in fuel prices also comes just as the fall harvest season gets underway. Diesel is a key fuel used in farming equipment, and higher input costs could lead to higher food prices.\n <\/p>\n \n Goldman Sachs warned clients on Monday that global food prices are at risk of going sharply higher. The Wall Street bank blamed soaring diesel and fertilizer costs caused by the Strait of Hormuz crisis, tensions in the Black Sea threatening the global grain trade and the risk of drought and extreme heat brought on by El Nino.\n <\/p>\n \n Lastly, diesel is virtually indistinguishable from home heating oil, which is used to heat about 5 million homes mostly in the Northeast, including about half the homes in Maine.\n <\/p>\n \n \u201cConsumers who use heating oil for their home are going to have quite a sticker shock when they get the first delivery for the season,\u201d Lipow said.\n <\/p>\n \n With global oil prices closing at $107.63 a barrel, average diesel prices in the US are likely to climb higher, perhaps as much as $7 a gallon, he added.\n <\/p>\n