As summer travel — and the demand for gasoline — dropped, the price at the pump has, too, but that hasn’t been the case with diesel, which on Labor Day hit a new all-time high nationally. It's a cost that everyone is indirectly paying, whether you fill up with diesel or not.
What’s more, diesel prices are expected to stay high through winter and could, if the cost of goods rise and confidence in the economy sags, help the Grinch steal Christmas — or some of the joy of it, anyway.
Diesel on Tuesday was $5.89 a gallon in Michigan, a penny below the new national average record of $5.90 a gallon, which had gone up in the past month nationally from $5.35 a gallon. Michigan, however, saw a record state average in May of $6.20 a gallon.
In contrast, the
average price of Michigan gasoline was $4.02 a gallon on Tuesday, Sept. 8, down a penny after the Labor Day holiday, the traditional end of the summer. That’s down a dime a gallon from a week ago and 15 cents from a month ago.
"Diesel is the fuel that moves the economy, and when diesel prices reach record levels, the impact extends far beyond the transportation sector," Patrick De Haan, head of petroleum analysis at GasBuddy, said last week. "Higher diesel prices impact consumers as rising supply chain costs increase the price of groceries, household goods, deliveries, and countless other products Americans rely on every day."
That, of course, also would include the cost of holiday presents.
A global energy crisis
Throughout Michigan, the most expensive gasoline price averages on Monday were in Ann Arbor, $4.12 a gallon, metro Detroit, $4.11 and Marquette, $4.04; the least were in Grand Rapids, $3.89, Flint, $3.91, and Saginaw, $3.96.
But diesel prices — which not only fuel some passenger vehicles but also commercial trucks, trains, ships and industrial machinery — have climbed as geopolitical tensions and supply chain disruptions continue to drive volatility in global energy markets.
The increased cost, and now a widening price gap with gasoline, has been a result of higher oil prices, reduced refining capacity abroad, and tight global inventories, and analysts warn that diesel prices are more than $2 a gallon compared with a year ago.
According to the Independent Grocers Alliance, fuel is about 15% to 30% of the total cost of food.
On Tuesday, crude oil prices surged toward $100 a barrel after Houthi militants reportedly attacked Saudi Arabia. The war has effectively impeded oil from flowing through both the Strait of Hormuz and the Red Sea, key waterways that have been blocked.
The higher fuel prices are likely to affect not only the economy but also the midterm elections.
Promises, promises, promises
News outlets like the Washington Post are pointing out things, including gas prices, that President Donald Trump had promised to lower while campaigning for office, and the perception of whether he delivered is likely to define legislative campaigns. The price of gas is now more than twice what Trump claimed it would reach.
In 2024, Trump repeatedly said he'd bring gas prices down below $2 a gallon.
Voters, the Post reported, have been increasingly weary of inflation and stagnating wages.
Higher fuel prices, which also include the skyrocketing prices of jet fuel, are largely a consequence of America’s ongoing war with Iran, which, so far, has lasted more than six months — now nearly as long as the Gulf War in the early 1990s — with no end in sight.
But fuel supplies also, are tight, Reuters news service reported that senior petroleum industry executives said on Tuesday, as a result of a lack of spare refining capacity, Russia's ban on exports and the approach of peak winter demand.
That also means businesses will be passing on — if they aren’t already — the additional transportation costs to consumers through added fees or just adding the cost into the price of goods, which could mean folks cut back on holiday presents, which will cost more.
Contact Frank Witsil: 313-222-5022 or fwitsil@freepress.com
This article originally appeared on Detroit Free Press: No matter what you drive, record high diesel prices are costing you
