Ga., S.C. diesel crunch could push prices higher on everything
AUGUSTA, Ga. (WRDW/WAGT) - Georgia officials are responding to the diesel fuel shortage that’s expected to hit the Southeast, including Georgia and South Carolina.
The shortage could mean higher prices for everything.
An official supply alert says “poor pipeline shipping economics and historically low diesel inventories are combining to cause shortages in various markets throughout the Southeast.”
In turn, we’re seeing higher diesel fuel prices.
And because diesel fuel is used in shipping just about everything, those prices are likely to be ed on to consumers.
Poor pipeline shipping economics and low diesel inventories are causing shortages, according to Mansfield energy.
The agriculture commissioner of Georgia, Gary Black, says: “When you see tighter supplies, you’re always going to see higher prices. When those higher prices for basic inputs: fuel, labor, those kinds of things that we’ve seen escalate over time, the natural result of economics is that that’s going to be reflected in the retail price that you and I pay.”
Black adds the war between Russia and Ukraine also is contributing.
“We’re down about 11 or so refineries in America since COVID. Some of the less efficient ones were casualties of COVID that’s reduced our productive capacity to actually produce the product,” Black says.
Black says Colonial Oil, which is a major supplier of oil in the state of Georgia, is operating all its refineries.
Joey Von Nessen, a University of South Carolina research economist, called rising diesel prices a “hidden cost” to some.
“In many cases, we don’t necessarily see the importance of diesel in our day-to-day lives directly, but it’s there,” he said.
Von Nessen said this issue could drive up the cost of everything, from groceries to online purchases.
“Most of the freight traffic in the United States is based off of diesel fuel and so when there’s a supply constraint and we see elevated prices, that is ed onto the consumer,” he said.
Von Nessen added that this could exacerbate the upward pressure on inflation and lessen the effectiveness of rate increases from the Federal Reserve.
Jerry Edwards, a South Carolina truck driver, said he is currently paying three times as much for fuel as he was five years ago, which is making it harder to get goods to consumers.
“On top of that, 10 years ago we were going twice as far with that fuel,” he said. “So it’s making it real difficult. I do a lot of loads for BMW and with the way that they pay for the freight, it’s making it really hard on the small business.”
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