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Record diesel prices are having a detrimental effect on the economy, the entrepreneur warns

An industry analyst is warning that a gallon of diesel could hit $10 by the end of the summer.

WENATCHEE, Wash. – Diesel fuel is powering America’s economy. Almost everything we consume is delivered with diesel – whether by ship, truck or train.

Rising diesel prices are costing consumers everywhere.

“I think it’s bullshit,” said Brian Snyder, who runs an asphalt company in Wenatchee.

Because trucking companies often impose a fuel surcharge on customers as prices rise, Snyder says a shipment of asphalt sealant now costs $3,000 more per truckload than it did last year. This has forced him to increase his prices for customers by 20%.

Snyder believes oil companies are hollowing out the transportation industry to offset losses during the COVID-19 pandemic.

“Where are they outperforming us? They’re beating at the trucker level, where they have to use diesel fuel,” Snyder said. “It’s not rocket science.”

According to the AAA, the national average for a gallon of diesel is $5.55. That’s an increase of 36 cents from last month. Washington’s average is even higher at $5.72 a gallon — 23 cents up from a month ago.

Diesel is also of crucial importance for use in agriculture.

Higher diesel prices could force farmers to cut back on crops or fertilization, restricting already tight food supplies and driving up food prices beyond the additional cost of transportation.

The Western States Petroleum Association (WSPA) says it comes down to supply and demand.

“Some stocks of diesel that would have been here are being exported to Europe because of the war,” said WSPA spokesman Kevin Slagle. “If we also look at supply chain requirements, the demand for diesel is extremely high due to the pandemic.”

Leading energy economist Phil Verleger told CNN this week that tight supplies could push the average US price of diesel to $10 a gallon by the end of the summer.

He warned that rising diesel prices could slow the US economy.

The national median price for regular gasoline is $4.42 per gallon. That is almost 50% more than in the previous year.

“Everyone out there is paying for it and they need to get angry,” Snyder said, directing his anger at oil industry executives.

“It’s not helpful to demonize our industry and the men and women who provide reliable and affordable energy,” countered Slagle. “It’s not about the political issues at the heart of the problem. It needs to be talked about.”

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