Driving up the cost of diesel is driving up other prices

 CNN Business:

Although prices at the pump serve as one of the most prominent symbols of rampant inflation, economists are more worried about the spillover effects of price spikes for another major source of fuel: diesel.

Diesel plays an outsized role in consumer prices because it and its chemical cousins, jet fuel and maritime fuel oil, move nearly everything that is grown, processed or manufactured around the globe.

"Diesel is what powers trucking. It is what powers our global economy," said Joseph Sykora, equity analyst at Aptus Capital Advisors. "It can't be ignored in terms of how it's a feed-through into what things cost."

America consumed about 128 million gallons of diesel a day in 2021, according to the US Energy Information Administration, but production -- especially refining capacity -- hasn't kept up with the post-Covid surge in demand and scarce supply has sent prices soaring.

According to the June Consumer Price Index released Wednesday, the category of energy that includes diesel rose by 75.8% year-over-year, an even greater increase than the 59.9% rise in gasoline prices.

While the cost of oil and gas has retreated in recent weeks from springtime peaks, analysts are skeptical that this reprieve will last -- and that's before factoring in the prospect of an unusually active hurricane season or additional geopolitical shocks like Russia slashing fuel exports to the European Union.

"Inventories haven't been this low in a generation worldwide. You've got potential for problems even if we get through this gauntlet of worries about power grids and hurricanes in the next few months," said Tom Kloza, global head of energy analysis for OPIS. "If there's a fuel that could go absolutely ballistic, I think it's diesel."

Demand for diesel is less elastic than for regular gas. While people can respond to high gas prices by using their cars less, there aren't any good alternatives to diesel at the industrial level, said Bill Fitzpatrick, managing director and portfolio manager at Logan Capital Management.

"We're all scrambling for solutions, but the breakthrough technologies just haven't come to fruition yet. It appears as though we're trying to bridge the gap with regard to our dependence on fossil fuels, but we're just not there yet," he said.
...

This is a point I have been making about the consequences of Biden deliberately driving up the price of fossil fuels in the vain attempt to "transition" to something that does not exist at this point and may never exist.  Biden's energy policies following the pandemic have made things much worse.

See, also:

I&I/TIPP Poll: Americans Want Their Old Fossil-Fuel Economy Back

President Biden's climate change policies, which many blame for rising fuel prices, are unpopular with the public.

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