High diesel prices may put 'another squeeze' on the consumer, economist says
The impact of soaring diesel prices is less evident to consumers than that of gasoline.
TL;DR
- Diesel prices have increased by 68% since the start of the Iran war, surpassing gasoline price hikes.
- Businesses are expected to pass on higher diesel costs to consumers through increased prices for goods.
- The impact of diesel prices on consumers is indirect and can take six months to a year to fully manifest.
- Economists estimate that a $1 increase in diesel cost per gallon could raise overall inflation by 0.1 percentage points.
- The Group of Seven nations agreed to release diesel stocks to combat rising prices, and the U.S. president allowed broader use of cheaper red-dyed diesel.
- Goldman Sachs forecasts diesel prices to remain high through 2027 and expects them to cumulatively boost food prices.
- Both the Iran war and Russia's war in Ukraine have contributed to higher diesel prices.