For months now, Americans have grappled with the historically high cost of many essentials. Inflation reached record highs earlier in the year, and though the rate of inflation has eased somewhat, its effects are everywhere. This is arguably most obvious in the fuel sector, where the prices of diesel and gasoline remain extremely high.
The cost of diesel in particular has massive ramifications for the rest of the economy. Diesel is what haulers use to transport all sorts of goods around the country. From food and gasoline to luxury products, the price of diesel affects the price of nearly all goods. So, will its cost ever come back down? Or will consumers be stuck paying more forever?
Diesel prices will come up with production
The prices of fuels of all kinds are inflated right now due to the Russia-Ukraine conflict. Because the US and many other countries paused imports from Russia in reaction, the global supply of oil and diesel is artificially low right now. Barring an end to that conflict, though, is there a way prices can come down?
An encouraging sign for consumers is that the US is massively increasing its capacity to produce diesel. Both refineries and distilleries have increased their production capacity in response to the current shortage. This should help increase supply, reducing the price of fuels across the country.
It’s also worth remembering that prices ebb and flow naturally, and that these high prices cannot last forever. Eventually, the cost of diesel and other goods will become more manageable.
Will diesel prices come down enough?
However, while prices will come down, they may not come down enough for consumers. Inflation isn’t as bad as it was earlier in the year, but it is still high. And certain states, like poor Connecticut, are now facing regulatory decisions that could further increase the burden on consumers. Connecticut is expected to increase its diesel fuel taxes this summer, which would inevitably pass on some costs to consumers.
Diesel is absolutely necessary for the US to function as it normally does. Presently, its cost is too high for a country still reeling from massive inflation, not to mention the pandemic. Hopefully, the ship will right itself soon and the price of diesel will come back down to a manageable level.