Diesel Fuel Prices Could Help Push US Grocery Costs Even Higher
Key Takeaways
- •The US national average diesel price has risen more than 57% year over year, according to AAA and OPIS data.
- •Refrigerated foods such as seafood, fresh fruit, and vegetables are typically the first grocery categories to rise in price when transportation costs increase.
- •About 2% of US households own or lease a diesel-fueled vehicle, so higher diesel prices directly affect their cost of living.
- •Trucking carries the majority of US freight by value, allowing shippers and retailers to pass fuel costs through to consumers over time.
- •The EIA projects US consumption of diesel, jet fuel, and gasoline to fall through 2026, the first projected decline in petroleum-based fuel demand in four years.
Diesel Fuel Prices Could Help Push US Grocery Costs Even Higher
Refrigerated foods, including seafood, fresh fruit and vegetables, and other items transported in refrigerated trucks, are among the first food categories to see a price increase when transportation costs rise. Refrigerated trucking is more energy-intensive than standard freight, since refrigeration units run continuously during transport, which is one reason this segment tends to feel fuel cost shifts earlier than shelf-stable goods.
For the roughly 2% of US households that own or lease a diesel-fueled vehicle, rising diesel prices directly affect their personal cost of living. At current levels, the US national average for a gallon of diesel fuel is up more than 57% year over year, according to AAA and OPIS data.
For all consumers, high diesel prices can eventually push up prices of other food categories and everyday goods, because trucks, railroads and other modes of freight transportation move most of what the country buys. Trucking in particular carries the majority of US freight by value, so fuel is a significant operating cost that shippers and retailers can pass through to consumers over time as contracts and delivery schedules are renegotiated.
According to the US Energy Information Administration, about 10% of all US energy use currently comes from petroleum-based fuels, mostly gasoline, diesel and jet fuel. The vast majority of diesel consumed in the US is for transportation, primarily to move freight across the country.
Between the 1970s and the late 2010s, the share of US petroleum consumption used for the transportation sector rose, the EIA said.
Diesel fuel price increases over the past several years have pushed down US demand. For the first time in four years, the EIA projects US demand for petroleum-based fuels will fall in the coming years.
The EIA projects falling US consumption of diesel, jet fuel and gasoline through 2026. For grocery shoppers, the EIA's short-term energy outlook and AAA's daily diesel price reports are the primary sources to watch for signals of whether fuel-driven pressure on food prices is easing or continuing.
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The rising cost of diesel fuel is adding pressure on top of higher costs for eggs, beef, and other groceries across the US, with refrigerated foods among the first to see price increases.
Background
- AAA reports national average diesel fuel prices daily.
- The EIA publishes short-term energy outlooks, including diesel fuel price and demand projections, at
- The US national average for a gallon of diesel fuel is up more than 57% year over year, according to AAA and OPIS data.
- Refrigerated foods, including seafood, fresh fruit and vegetables, and other items transported in refrigerated trucks, are among the first food categories to see a price increase when transportation costs rise.
- For the roughly 2% of US households that own or lease a diesel-fueled vehicle, rising diesel prices directly affect their personal cost of living.
See also
Diesel prices could help push up US grocery costs via EIA
