U.S. average diesel price hits a record $5.85 a gallon, up 58% from $3.71 a year ago

The national average price of diesel hit $5.85 a gallon on Friday, Sept. 4, according to AAA, passing the record of about $5.81 set in June 2022 after Russia invaded Ukraine. A year ago the average was $3.71, so the pump price is up 58%. Two wars are squeezing supply. The six-month war between the U.S. and Iran has cut crude flowing out of the Persian Gulf, and Ukrainian drone strikes on Russian refineries pushed Moscow to extend its ban on diesel exports through the end of September. Diesel moves nearly all American freight, which is why the spike lands on groceries and other goods. "Diesel is an input to virtually everything we consume," said Erich Muehlegger, an economics professor at UC Davis. Sen. Mark Kelly (Sen-D Arizona) wrote on X that "diesel prices have skyrocketed since Trump started his war with Iran," and that the cost reaches the grocery aisle. White House spokesperson Taylor Rogers said the president "remains committed to unleashing American energy dominance" and that prices will fall "as the U.S. military fully degrades the terrorist Iranian regime's ability to attack shipping vessels." (TS: The U.S. government estimates a sustained global disruption of about 600,000 barrels a day through 2027.)

What the diesel spike is already adding to shipping and food bills:

• FedEx and UPS raised fuel surcharges; Amazon added a temporary 3.5% fuel-and-logistics fee on some third-party sellers.
• Seafood prices are up 7% and fresh fruit 4.9%, against 2.7% overall grocery inflation in July.
• Diesel is 3%-5% of input costs for U.S. wheat and corn farmers, and fuel runs 15%-30% of total food costs.