From Vox · Caitlin Dewey · · 1m 30s
The overlooked factor making everything more expensive
The cost of diesel quietly raises the price of goods across the economy. You're likely paying for it already.
In brief
The cost of diesel quietly raises the price of goods across the economy. You're likely paying for it already. Diesel price spikes affect nearly every product you buy because trucks, trains, and farm equipment can't easily cut back on fuel use. Originally reported by Vox.
Diesel hits record high
Diesel reached $6.40 per gallon this morning, up 73 percent from a year ago. The price surge affects far more than just truck drivers.
Why diesel affects everything
Semis, tractors, excavators, freight trains, cargo ships, and garbage trucks all run on diesel. That means diesel costs touch virtually every part of the economy.
What caused the spike
The US war with Iran started the rise. Then an attack on Saudi Arabia's pipeline and Ukrainian drone strikes on Russian refineries made things worse.
Trump's response so far
President Trump asked Ukraine to stop targeting refineries and relaxed labor rules for fuel truck drivers. He's considering invoking the Defense Production Act.
“Not on the solution list, notably: winding down the war in Iran, which kickstarted this whole thing.”
The hidden cost to households
Brown University researchers estimate the extra diesel costs since the Iran War began work out to roughly $374 per US household.
Why businesses can't cut back
Diesel demand is inelastic. A farmer halfway through harvest can't just stop running a combine because fuel gets expensive.
Where you'll feel it first
Expect higher grocery bills, especially on perishable products that travel long distances. Milk, meat, fruits, and vegetables will cost more.
The short version
Diesel price spikes affect nearly every product you buy because trucks, trains, and farm equipment can't easily cut back on fuel use.
