Inflation, Food Shortages, and Supply Chain Collapse: Skyrocketing Diesel Is the Existential Threat Nobody's Talking About
Well, I shouldn't say NOBODY is talking about it. We are, obviously, as are a few others. But if more people knew how bad this really could be, they wouldn't be watching Johnny Depp and Amber Heard.
Editor's Commentary: Truckers, loaders, and machine operators have been taken for granted. Their efforts are absolutely crucial to our economic infrastructure and supply chain stability. Even incremental shortages of labor or equipment can cause massive chain reactions, which we've seen playing out as the supply chain crisis of 2021-22.
It's about to get worse. Much worse. Diesel drives more than just the trucks. It's the fuel that powers much of the equipment without our supply chain as well, and its cost is skyrocketing much faster than unleaded gasoline. No other component of the American economy has a more direct effect on the prices of literally every physical good transported anywhere in the nation than the trucking industry.
The cost of diesel doesn't just affect how much it costs to transport goods and thereby the prices of those goods themselves. It also contributes to decision-making on what to transport where. For example, an east coast company may decide it's simply not cost-effective to ship their goods to the west coast if diesel prices continue to rise. That could cost jobs on top of lost revenues.
What makes it all worse is that nobody in media, corporate or otherwise, is really talking about this. The handful of independent journalists who are ringing the alarm bell aren't getting nearly enough traction to make enough Americans aware. We desperately need lawmakers contacted so we can talk some sense into them regarding what's coming down the pike.
The article below by Mary Villareal from Natural News details why we should be extremely concerned about the state of diesel prices and how it will generate a massive economic domino effect if we do not get things turned around immediately...
No Signs of Slowing Down: Diesel Price Jumps 42.8% From Beginning of the Year, Way Ahead of Gasoline’s 25% Increase
The increase in diesel price has raced past that of gasoline. Data from the Department of Energy‘s Energy Information Administration (EIA) showed that diesel price has jumped a staggering 42.8 percent while the price of gasoline has increased 25 percent from the beginning of the year.
Given the enormous role of Russia as a supplier of diesel, it is easy to blame the ongoing war between Russia and Ukraine for the soaring prices. However, the increase in the price of diesel compared to crude and gasoline began even before the war started.
The price that truckers and motorists pay at the pump is determined by the price of crude. But if the relationship between crude and diesel goes through structural changes that tack on another 10 to 15 cents a gallon to the spread, those gains are going to impact the retail price of diesel even if crude price remains unchanged.
The spread of the prices was just under 40 cents per gallon a year ago but has now increased to up to $1.20. The spread crossed the $1 per gallon mark on March 18 of this year after starting the year at only 27 cents.
But the retail price is already at the end of a long supply chain that includes oil production, the selection of the types of crudes for a refinery to process, and the split output that includes gasoline, diesel, jet fuel, and other products. The growth in the gasoline-to-retail spread is ultimately the final step after changes in the spot products market. (Related: Germany, Austria move closer to rationing gas supplies.)
Diesel prices driving up costs of goods
As consumers notice the spiking gasoline prices, energy industry analysts say the current spike in diesel prices is historic in the sense that it is pushing up costs of goods. Now hovering at all-time highs, diesel prices are being forced upward by the same circumstance that fueled gasoline’s rise.
Patrick De Haan, head of petroleum analysis for GasBuddy, said the price of fuel is the bigger headline as nearly everything people buy is at some point freighted in a vehicle powered by a diesel engine, including ships and barges, trains, trucks and even some airplanes.
This massive increase is hitting consumers hard, including truckers who spend nearly twice the amount for fuel per week. Freight industry analysts also suspect that the very fragmented and volatile trucking industry will likely experience another severe recession, with others going as far as calling it a bloodbath.
“We see when fuel surges as much as it has over the past couple of months, that’s usually when we see a lot of trucking bankruptcies follow,” said Craig Fuller, founder and CEO of industry tracker Freightwaves.
This is bad news for the nearly two million trucking companies in the United States, the vast majority of which are smaller businesses with just a handful of trucks. (Related: Newsom wants to spend $11 billion to give Californians $400 gas cards, throwing more incendiary money into an already inflationary economy.)
“These small operators that live essentially on the cash flow of their trucking operations are not prepared and don’t have the balance sheets or the cash position to absorb these instantaneous shocks to their cash flow,” he said.
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People have their priorities until there is no food and basic necessities. We are living in frightening times.
Thinking about the cascading effect of this one factor is mind-numbing. And then adding every other destructive force at work is enough to roll up the sidewalks and shutter the house.