Diesel prices reached a nationwide average of $5.54 per gallon on Monday, setting a new all-time record, according to AAA travel agency’s gas tracker. In March, the cost of regular unleaded fuel remained less than half a cent from its record high of $4.33 per gallon, at $4.328 on Monday.
These high fuel costs are just the first devastating drop, the negative effects of which will ripple throughout the entire economy, with increased transportation prices adding stress to inflationary pressures already shooting up the cost of goods and services. In March, the year-over-year inflation was marked at 8.5 percent, the highest rate since 1981. Bloomberg Economics predicts that U.S. households will spend another $5,200 this year, or $433 a month, for the same basket of goods as last year.
While diesel prices might not immediately alarm many consumers who rely on regular unleaded gasoline for routine transportation, tankers, trains, trucks, farming machinery and other industrial equipment rely on diesel.
“Diesel is the fuel that powers the economy,” Patrick De Haan, the chief petroleum analyst at GasBuddy, told CNBC. These increased costs are “certainly going to translate into more expensive goods.”
Despite the price increases, the Biden administration has continued to antagonize the oil and gas industry with a cascade of new taxes and regulations that hamper production.
In April, President Joe Biden’s Department of the Interior released plans to resume oil and gas leases on federal lands in compliance with a court order following a 15-month suspension. The agency’s compulsory sales offered only 20 percent of the lands that were initially nominated and approved for leasing, complemented by a 50 percent spike in royalties from minerals extracted.
Despite moving forward, the administration has been clear about its desire to shut down the federal lease sales. These sales were only scheduled after a federal judge in Louisiana deemed the administration’s pause on them illegitimate last summer.
“We don’t feel they are needed,” explained White House Press Secretary Jen Psaki, even as Psaki and the president repeatedly blame Russia’s war in Ukraine as the reason for rising prices with the motto “Putin’s price hike.”
White House climate adviser Gina McCarthy has been even more explicit.
“President Biden remains absolutely committed to not moving forward with additional drilling on public lands,” McCarthy said on MSNBC.
The left’s animosity to oil and gas exploration has chilled investment in the labor- and capital-intensive industry, cooling production in the process even as prices skyrocket. To suppress gas prices ahead of the November midterms, President Biden ordered the self-proclaimed “unprecedented” release of stored crude from the nation’s emergency stockpile, with 1 million barrels put on the market daily for the next six months beginning next week.
The president has offered no plans to restock the emergency reserves.