Soaring Cost of Diesel Ripples Through the Global Economy

 If we look at the beginning of the pandemic, diesel prices began to fall fairly quickly as the overall economy began to shut down.  With firms being shut down throughout the country, these prices were low.  Early in 2021, however, traffic resumed and these prices began their climb.  These increases spiked even more with Russia moving troops into Ukraine.  With Russia being a major fuel exporter, and the low stockpiles of fuel overall, these prices could keep rising indefinitely.  

While many consumers may not think about goods this way, every good requires the use of fuel in some capacity to make.  For example, crops require heavy machinery to produce and collect: tractors, combines, etc. Every good gets transported somehow as well; from trains and trucks to boats and planes, every method requires fuel.  These sudden increases in fuel prices are pushing inflation up and heavily impacting supply chains.  The most noticeable effect inflation will have on goods is in "big ticket items", these would be bigger home appliances and vehicles, but overall the consumers will begin to feel an increased effect of inflation on all goods.  

While fuel prices seem shockingly high in the United States, Europe is also being hit quite hard.  A gallon of diesel, on average, in the United States is ~$5.19, while in Germany it is 2.15 euros per liter or $9.10 per gallon.  This is an increase from February prices being 1.66 euro per liter.

https://www.nytimes.com/2022/03/31/business/economy/diesel-economy-russia-ukraine.html