Trucking, farming and heating homes is set to get more expensive as diesel prices surge to highs not seen since 2014.
In yet another setback for the Biden administration that’s facing mounting pressure to rein in inflation, diesel futures in New York have jumped 12% so far this year, settling at $2.6085 per gallon on Thursday, their highest in more than seven years.
Inflation has become one of President Joe Biden’s biggest challenges, with higher prices for everything from crops and lumber to meat and energy increasing the cost of living for Americans. Consumer prices rose last year by the most in nearly four decades.
Diesel prices have risen as U.S. refiners began a heavy maintenance season this month, when fuel stockpiles are already at eight-year lows. A fire at one of the country’s largest refineries took out even more fuel-making capacity at the end of last year.
Rising jet fuel demand has also eaten into diesel output in recent months as Americans warm up to air travel again. Refiners have some room to toggle between diesel and jet fuel, and they’re increasingly choosing the aviation fuel.
Meanwhile, demand for diesel is strong as consumers continue to depend on goods delivered to their doors by trucks. Low temperatures in the northeast is bolstering diesel use for home heating. And in a month, farmers in the Midwest will be looking to stock up fuel to power machinery for the crop planting season.