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September 25, 2023

Big Problems With Biden’s High-Priced Diesel Fuel

Joe Biden’s restrictive energy policies are creating higher costs for all consumers.

In June of last year, the average price of diesel at the pump hit a record high of $5.82 per gallon. While gas and diesel prices have both fallen from last year’s highs, they have still come nowhere near the $2-per-gallon levels enjoyed during much of Donald Trump’s presidency.

While sustained high inflation has certainly contributed to the high cost of diesel, a bigger factor has been that age-old market rule of supply and demand. As supplies of diesel fuel have decreased, the cost of diesel has risen … which then causes more inflation.

While the global pandemic certainly contributed to this reduction in supplies, several other factors have ensured that levels have remained low.

Back in June 2019, a fire destroyed the Philadelphia Energy Solutions refinery. That refinery was responsible for providing roughly 30% to 35% of the diesel fuel for the Mid-Atlantic and Northeast, and its permanent closure has resulted in diesel fuel having to be piped in from the Gulf Coast. That of course raises costs.

Furthermore, COVID’s impact on the economy served to temporarily shut down refineries’ annual scheduled maintenance operations. Now many are scrambling to get these refineries serviced, and production slows down during maintenance operations. That lower output leads to lower supplies.

The ongoing war in Ukraine has also been a contributing factor, as NATO and the U.S. slapped sanctions on Russian oil and natural gas. With Russian fuel off the market for Europe and the U.S., the demand for crude from OPEC nations increased.

The trouble is, the Biden administration has done little to address the diesel shortage. If anything, Joe Biden has only contributed to it.

Therefore, all indications are that the price of diesel, which currently comes in at roughly $4.60 per gallon, is expected to only keep rising. Some are predicting that diesel could top $5 a gallon in the coming months.

This is bad news for everyone, as diesel fuel is essential for moving goods all across the country and therefore directly impacts the cost of those products. Furthermore, diesel fuel is directly tied to America’s food supply, as farmers depend upon it for running their farm equipment.

In a real sense, the world runs on diesel. It affects everything from planting to shipping to heating. The price for travel, food, and, well, just about everything else will be impacted by the rising cost of diesel. And for the foreseeable future, no amount of investment in renewable energy can offset that increased cost.

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