The hidden $350 surcharge on American households

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This story was originally published by Grist and is reproduced here as part of the Climate Desk collaboration.

Diesel prices hit an all-time high on last week. Then another, and another.

According to AAA, the average price of diesel as of September 10 stands at a staggering $5.98 — about $2.31 more than in late February, when the United States and Israel launched a war against Iran. The jump has been even higher in some states, such as California, where a gallon of diesel currently costs $7.91.

Most Americans don’t buy diesel fuel, but they pay for it indirectly in so many ways.

It powers the trucks and ships that move everything from milk to lumber, and the costs are embedded in the prices people see at stores. The last time consumers saw diesel prices climb to such heights was in 2022, when Russia invaded Ukraine and they hit $5.82 per gallon.

This year, the Iran war has largely closed the Strait of Hormuz, through which 10 percent of seaborne diesel once traveled. This has sent prices soaring, and consumers are increasingly feeling the impact.

“Early on, much of the cost increase gets absorbed along the supply chain through existing freight contracts and retailer margins,” David Ortega, a professor of food economics and policy at Michigan State University, told the Associated Press. “But as contracts reprice and fuel surcharges take hold, more of that cost makes its way to the grocery store.”

All told, the rising price of diesel has cost US consumers an additional $46 billion, or about $350 per household, according to a Brown University tracker. That’s slightly less than the impact of rising gasoline prices — at $55 billion — but the 61 percent jump in diesel prices has outpaced the 41 percent increase in gas.

“Diesel right now is caught up in more of a geopolitical turmoil than gasoline,” said Patrick De Haan, head of petroleum analysis for GasBuddy, an app that lets consumers track fuel prices. In addition to the Iran war, Ukraine’s increasingly successful attacks on Russian oil refineries have also applied upward pressure.

“Russia is no longer supplying the global market,” said De Haan, and US refineries are already at full capacity, giving them little ability to pick up the slack. Domestic inventories are at their lowest level since 1982, according ​to data from the Energy Information Administration.