Why diesel prices are so high and what it could mean for the cost of living

The useful part

The price of diesel fuel is at a record high in the United States, recently reaching an average of $6.53 per gallon. A year ago, it was averaging $3.69 per gallon, meaning it has skyrocketed roughly 77%. That is, diesel fuel powers many heavy-duty trucks, tractors, ships, and even locomotives, among other machinery, effectively giving life to some of the largest industries in the world.

How it works

• As such, with diesel prices up, that means overall costs go up, which cascades down into goods and services.
• If the cost of fueling up a tractor on a farm increases 77% in a year, the cost of the goods the farm produces is going to increase as well.
• For industries or businesses that often straddle a very thin line between profit and loss, a significant price hike could be a death knell.
• Ultimately, it's likely that pretty much everything is going to become more expensive as a result of the diesel price spike.

What to take from it

While the price of standard, regular unleaded gasoline is also sky-high (averaging around $4.50 per gallon), the price of diesel has come to dominate the latest news cycle, mostly because it's one of the most important cost inputs in the broader economy.

Details worth keeping

"High diesel prices ARE KILLING FARMERS INCOME," Republican Sen.