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Record diesel prices having a ripple effect on the economy, business owner warns

One industry analyst warns a gallon of diesel could hit $10 by the end of the summer.

WENATCHEE, Wash. — Diesel fuel powers America's economy. Just about everything we consume is delivered by diesel -- whether it's by boat, truck or train.

Rising diesel prices are costing consumers everywhere.

"I think it's hogwash," said Brian Snyder, who runs an asphalt company in Wenatchee.

Since trucking companies often apply a fuel surcharge to customers when prices rise, Snyder says a delivery of asphalt sealer is now $3,000 more per truckload than last year. That has forced him to raise his rates for customers by 20%.

Snyder believes oil companies are gouging the transportation industry to make up for losses during the COVID-19 pandemic.

"Where do they gouge us? They gouge at the trucker level where they have to use diesel fuel," Snyder said. "It's not rocket science."

According to AAA, the national average for a gallon of diesel is $5.55. That's a 36-cent increase from last month. Washington's average is even higher at $5.72 per gallon -- up 23-cents since a month ago.

Diesel is also critical for use in agriculture. 

Higher diesel prices could force farmers to scale back plantings or fertilizing, limiting already tight food supplies and driving up food prices beyond the added cost of transportation.

The Western States Petroleum Association (WSPA) says it comes down to a matter of supply and demand.

"Some diesel supplies that would've been here are being exported to Europe because of the war," said WSPA Spokesman Kevin Slagle. "Additionally, when we look at supply chain demands, demand for diesel is extremely high coming out of the pandemic."

Leading energy economist Phil Verleger told CNN this week that tight supplies could send the average US price of diesel to $10 a gallon by the end of the summer.

He warned rising diesel prices could put the brakes on the US economy.

The national average price for regular gasoline is $4.42 per gallon. That's up nearly 50% from last year.

"Everybody out there is paying for it and they need to get mad," said Snyder, directing his ire at oil industry executives.

"Demonizing our industry and the men and women who provide reliable, affordable energy is not helpful," countered Slagle. "It's not addressing the policy matters at the heart of the issue. Those are what need to be talked about."

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