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The price of diesel has reached an all-time high, according to AAA.
The national average for a gallon is now $5.85. The price of diesel hasn't been this high since June 2022, when the average for a gallon reached $5.81 a few months after Russia invaded Ukraine, according to AAA data.
The record high is significant because diesel powers much of the industrial supply chain in the United States via the "three t's" of the economy: trains, tractors, and trucks, says Patrick De Haan, petroleum analyst at GasBuddy, a travel app that tracks gas and diesel prices.
A gallon of diesel cost $3.76 on the eve of the Iran war. It's now up more than $2. And De Haan says, when diesel drives the supply chain and that cost goes up, "There's going to be a trickle down."
Those increased costs trickle down into everything. Lots of farm equipment relies on diesel — so higher diesel risks making the cost of farming, and eventually food, more expensive. And when it's more expensive to fill up trucks, those transportation costs risk spilling over into much of what people buy. About 90% of the nation's 500,000 school buses run on diesel, and the rising price has stretched district budgets as the school year begins.
Americans are already experiencing sustained inflation. Inflation across the economy was up 3.4% over the past year, according to the latest Consumer Price Index data released in August. But energy prices are up significantly, which is eating into people's budgets, especially among lower-income households, according to an analysis from the Federal Reserve Bank of New York.
Prices for most types of petroleum products have gone up since the war with Iran began in late February, limiting how much could flow through the Strait of Hormuz. But other supply chain pressures have made diesel uniquely exposed to price hikes.
Some refineries in Asia have also limited their diesel exports, which has further constrained the global diesel supply.
Ukraine's recent attacks on Russian oil refineries have taken many diesel refineries offline; consequently, Russia has curtailed its own diesel exports, and has even started importing fuel from countries like India, Kazakhstan and Belarus.
Another factor is the price of jet fuel, which has also risen since the war began. "So what refiners in the U.S. did is they tried to take the opportunity of the price incentive to produce more jet fuel," said Jaime Brito, the head of Dow Jones Energy. He says in practice, it meant refineries made less diesel, resulting in less on the market.
Why it matters when diesel costs more
While most Americans encounter gasoline — and gas prices — every day, diesel powers much of the industrial supply chain.
"Diesel is the blood of the economy. It's the engine in which you move goods, food, agricultural goods from the farm to the supermarket," said Brito.
Both gasoline and diesel come from crude oil but they're refined into different products, with different combustion mechanisms and densities. That makes them suited for different kinds of engines.
There are seasonal factors that could keep the cost of diesel high for months to come. The price is normally higher around the fall, ahead of the harvest season, when it's needed to power agricultural equipment — 75% of which runs on diesel, according to the Engine Technology Forum.
And as winter draws nearer, people will turn on the heat — using heating oil that's almost chemically identical to diesel. When one gets more expensive, the other often does.
Copyright 2026 NPR
