The retail price of diesel in the United States has surged by more than one-third in the past month, putting pressure on costs across various sectors from freight to agricultural production, adding another economic risk as the Trump administration addresses the cost of living crisis.
According to data from the American Automobile Association (AAA), the national average price of diesel rose to $4.99 per gallon on Monday, March 16, a 37% increase from a month ago, marking the highest level since the Russia-Ukraine conflict in 2022.
Diesel is a key fuel for industrial operations, and the price spike has a cascading impact on truck carriers, farmers, and ordinary consumers. Ed Hirs, an energy economist at the University of Houston, bluntly stated:
<blockquote>
Diesel costs rise quickly but fall slowly. What the Trump administration can do is to end this conflict as soon as possible.
</blockquote>
The immediate trigger for this round of price increases is the actions of the U.S. and Israel against Iran, leading to turmoil in the Middle East, with the Strait of Hormuz subsequently being blocked, choking global energy supplies. Analysts believe that prices are unlikely to fall in the short term.
<h2>Trucking Industry Hit Hardest</h2>
The pressure felt by the transportation industry is the most direct.
Kareem Miller, CEO of Strong Pact Trucking, stated:
<blockquote>
Rising fuel prices are terrible because everyone will bear higher costs, and prices for groceries, building materials, and other goods will rise accordingly.
</blockquote>
Miller noted that his company's three trucks consume about 100 gallons of diesel per day, and the rise in fuel prices has resulted in an additional burden of about $750 per week. He also pointed out that large transportation companies can pass on costs through automatic surcharges, but smaller carriers often do not have this option and are in a more passive position.
<h2>Spring Planting Season Makes Agricultural Production More Difficult</h2>
This round of oil price shocks coincides with the start of the spring planting season in the Western Hemisphere, where farmers need large amounts of diesel to power heavy agricultural machinery such as tractors, combines, and pumps. The livestock industry is also particularly vulnerable due to its heavy reliance on diesel for transportation.
Data from the U.S. Department of Agriculture shows that U.S. farmers' spending on diesel is approaching $10 billion in 2024, accounting for about 2% of total production expenses.
Montana rancher Walter Schweitzer stated that prior to this crisis, agricultural production costs had been steadily rising, and coupled with tariff impacts on export markets, the number of agricultural bankruptcies in 2025 is expected to increase by 46% compared to the previous year. He added:
<blockquote>
Farmers are struggling to calculate which crops will incur the least losses.
</blockquote>
Jed Bower, president of the National Corn Growers Association, pointed out that rising fuel costs also have a transmission effect on fertilizer prices, which in turn affects farmers' planting decisions. Bower stated:
<blockquote>
Farmers have been dealing with high fertilizer prices for years, facing persistently high input costs for four years. The uncertainty in the Middle East complicates this situation further, and this year's corn planting costs will be the second highest in history.
</blockquote>
The American Soybean Association sent a letter to Trump stating that before the blockade of the Strait of Hormuz, the prices of agricultural inputs had risen by 15% to 95% over the past five years. After the blockade occurred, the increase further expanded, &#34;the cost of farming is higher than ever before.&#34;
<h2>Insufficient Refining Capacity Amplifies Price Pressure</h2>
Analysts believe that the United States' own refining capacity shortage is exacerbating the current rise in diesel prices.
The existing 132 refineries in the U.S. are generally aging and are more suited to process heavy crude oil from Venezuela and Canada, rather than domestic crude oil, leading to structural pressure on the supply of downstream products.
At the same time, some refining capacities are further contracting. Phillips 66 recently shut down its Los Angeles refinery, and Valero Energy also plans to close its Benicia refinery in California next month.
Last week, Trump announced plans to build the first large new refinery project in the U.S. since 1977 in Brownsville, Texas, but new capacity will take time to come online. Alex Jacquez, a former advisor to the Biden administration and policy advocacy director at Groundwork Collaborative, stated:
<blockquote>
Our infrastructure is outdated, and the current configuration cannot meet the domestic demand structure for downstream products
</blockquote>

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The average price of diesel in the United States rose to $4.99 per gallon on March 16, a staggering 37% increase from a month ago, reaching a new high since 2022. The surge in diesel prices has created a chain reaction impacting truck transportation and agricultural production: transportation costs have skyrocketed, and farmers are facing additional challenges during the spring plowing season. Analysts believe that diesel costs rise quickly but fall slowly

- The average retail price of diesel in the U.S. surged over 37% in the past month, reaching $4.99 per gallon amid rising costs for transportation and agriculture.  
- This price increase, triggered by escalating tensions in the Middle East, is impacting truckers and farmers, leading to heightened operational costs during the crucial spring planting season.  
- Analysts highlight that insufficient U.S. refining capacity exacerbates these price pressures, with existing facilities struggling to meet domestic demand for diesel.

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A one-month surge of 1/3! U.S. diesel approaches $5 per gallon, driving up transportation and agricultural costs