While oil prices and President Joe Biden’s ongoing draining of the Strategic Petroleum Reserves (SPR), have been the focus of media attention over the last few weeks, analysts believe that a more serious and significant crisis on the energy front is looming: a diesel fuel scarcity.
Diesel fuel doesn’t get the same attention as oil or gas. However, it should. Because diesel fuel is the lifeblood of American industry, the cost of diesel fuel has a greater impact on inflation than any other factor. Semi-trucks won’t move without enough diesel and farms will shut down. Critical manufacturing sectors are also affected.
Bloomberg reported this week that the US only has 25 days of diesel supply. This is the lowest level since 2008. According to the Energy Information Administration. The four-week rolling average of distillates provided, which is a proxy for demand and was at its highest level since 2007, also rose.
Biden’s administration has been strangely silent, possibly hoping that the news won’t reach the mainstream, as it’s a political bomb waiting to explode, especially with the midterm elections so close.
Bloomberg reported:
The diesel crunch is coming just weeks before the midterm elections. It has the potential of driving up prices for consumers who view inflation and the economy as tops on their list of priorities. For more than two weeks, retail prices have been rising steadily. According to AAA data, they are now at $5.324 per gallon. This is 50% more than last year.
Brian Deese, Director of the National Economic Council, recently spoke out on the crisis. Deese stated that diesel inventories were “unacceptably low” but added that “all options remain open,” regardless of what that might mean.
Apart from this remark the White House has not done much about the issue. This could undermine confidence in Democrats’ ability to lead America through difficult times.
Diesel is often called the “inflation canary” of America because it’s essential for all our survival. It’s clear that Americans will be financially devastated if there aren’t enough supplies and record-high prices to buy what is left. This will continue into 2023.
It’s likely to get very bad, folks. The worst part? The Biden administration doesn’t seem to care.
Taking from @JavierBlas: “US has just 106 million barrels of diesel stockpiles. Last time inventories were that low in mid-October was in 1951. Inventories should be 30% higher this time of the year.” Fed have another wave of energy-led inflation coming? https://t.co/HURQmUg2oH pic.twitter.com/vKMmCheowA
— Valerie Tytel (@ValerieTytel) October 19, 2022
This is truly a terrible situation. Let’s look at the details.
The supply of diesel fuel has been extremely low in recent years, which is what powers our daily lives. Due to the decreased supply under Biden’s presidency, prices have risen, making it more expensive to haul goods, farm, and all other things that require diesel fuel (pretty much everything), which will lead to significant increases in the prices of everything we need and use in the months ahead.
You can also add to this a cold and hard winter in many parts of the country. This will cause heating oil demand to skyrocket and fuel prices to rise over the competition for what is left.
The United States has just 25 days until our diesel gas supply is depleted.
Prices are going to skyrocket across the board if this happens.
— Ryan Fournier (@RyanAFournier) October 20, 2022
Although it would be absurd for the Biden administration to allow the problem to become so severe that it could cause a crippling crisis for America, it is not. It’s actually quite plausible, and it matches up with other jaw-droppingly dumb decisions made by the White House, which many believe are likely intended, for whatever sinister reason.
In other words, if prices at the pump and grocery stores are high, then you haven’t seen anything yet.
It’s a good idea to begin preparing for the worst if you have the resources and ability to do so.
