On March 9 U.S. truckers paid an average 96 cents per gallon more for diesel fuel than one week earlier. This is the largest ever one week increase in both price and in percentage terms since the U.S. Energy Information Administration began tracking data in 1994. All sectors are hit, from farm to manufacturing and retail.
On March 9 President Trump tried to argue that the U.S. is immune to oil shocks since there is sufficient domestic supply, but global circumstances strike back. Fuel surcharges are being passed on in many ways. Expected fuel costs will drive up the U.S. consumer price inflation annual rate to 3.5% by April or May at least, up from the current 2.4%.
Fuel hyperinflation is dramatic in many places. Jet fuel in Europe rose 80% from the Feb. 28 start of the Iran war until March 6. Airfreight which relies on Middle East transit hubs can be expected to double or triple in price. About 25% of the China-to-Europe airfreight and nearly all of India’s airfreight exports, depend upon airports in Doha, Dubai, and Abu Dhabi.
