'A direct hit for consumer prices': Diesel soars past $5 a gallon

The average price of diesel fuel hit $5.04 a gallon nationwide Tuesday, threatening to drive up the price of fresh food, shipping and construction.

The average price of diesel fuel hit $5.04 a gallon nationwide Tuesday, the latest fallout from soaring crude oil prices brought on by Iran’s blockade of the Strait of Hormuz, a critical oil transit route.

Diesel fuel is the refined product of crude oil and biomass materials, and it is used around the world to power vehicles like freight and delivery trucks, mass transit, ships, and farm and construction equipment. According to AAA, the last time diesel prices crossed the $5 mark was in December 2022.

Although the average American likely isn’t driving a vehicle that runs on diesel, the heavier gasoline is crucial to fueling the global supply chain.

“Diesel is what moves the real economy. It hauls the food, the packages, the building supplies and the inventory sitting on store shelves,” said Paul Dietrich, chief investment strategist at Wedbush Securities.

“If the Iran war keeps diesel prices elevated, this becomes a direct hit on consumer prices. Groceries get more expensive, delivery costs rise and household budgets are tightened,” he said.