The AAA reported an average diesel price for the U.S. of $5.60 per gallon during the first week of May, representing an 80 percent increase from the corresponding period in 2021.

Factors contributing to the rise include:

• Increased demand for a wide range of products and services following the relaxation of COVID restrictions increasing use of diesel fuel
• Geopolitical events including the invasion of Ukraine by the Russian Federation
• Lower refining capacity along the eastern seaboard

Disparity between supply and increased demand has reduced storage with February levels approximately one third less than the five-year average during the month.

The increased cost of diesel fuel has contributed to the rise in the consumer price index, which attained 8.3 percent in April close to a four-decade high.  In April, the Consumer Price Index for all urban consumers increased by 0.3 percent, lower than the 1.2 percent in March. The index for all items, less food and energy rose by 0.6 percent in April, higher than the 0.3 percent increase in March. 

It is possible that the CPI has peaked, given that the All Items Index increased 8.3 percent over the 12-month period ending in April compared to the 8.5 percent for the period ending March.  Food increased by 9.4 percent with dairy and related products, with the combination of meats, poultry, fish and eggs up by 1.4 percent.  The outbreak of HPAI resulted in an unseasonal escalation in the price of eggs that increased 10.3 percent in April.