Diesel prices are climbing even faster than gas prices. Here’s why you should care

By Chris Isidore, CNN

(CNN) — American drivers notice soaring gas prices. But another fuel – diesel – is also on the rise, and at a much faster pace.

While you’ve likely never bought a gallon of diesel, it’s still worth worrying about. That’s because much of the world’s economy – from consumer goods to the food you eat – gets to you thanks to diesel.

Since the fighting started in Iran a week ago, gasoline prices are up 47 cents, or 16%, to $3.45 for a gallon of regular, according to Sunday’s AAA reading. But that’s nothing compared to the 84 cent increase, or 22% rise in diesel prices, taking a gallon of that critical fuel to $4.60.

The reason diesel is rising so much faster than gasoline is that it was in shorter supply heading into this energy price shock, said Tom Kloza, an independent oil analyst and an advisor to global oil company Gulf Oil. He predicts diesel could hit $5 a gallon this month.

The freezing cold winter created huge demand for heating oil in the Northeast, where its still a common source of residential heating. Home heating oil and diesel are essentially identical products.

That means higher heating oil costs. But the real risk to consumers are higher costs to transport the goods they buy every day.

Nearly every item in your home was on a truck at some point, which mostly runs on diesel.

For smaller trucking companies, a diesel spike can be catastrophic.

Kareem Miller, who began operating his Chicago-based trucking business, Strong Pact Trucking, about three years ago, uses diesel for all three of his trucks.

“I’ve seen diesel prices fluctuate, but never spike that quick,” he told CNN last week. “It was bad.”

Miller said he may have to raise his rates soon to offset costs. But the larger trucking companies aren’t waiting. They all have schedules of fuel surcharges that raise or lower based on the price of diesel.

UPS, America’s largest trucking company, already increased its weekly fuel surcharge. It will likely do so again Monday.

It’s not just truckers who are raising transportation rates. Container shipping companies and other cargo carriers, which run on a fuel similar to diesel, have also started to impose fuel surcharges.

Diesel is also a key fuel for agriculture, and this a critical time of year, just ahead of the spring planting season.

Farmers depend on diesel to power their tractors and combines, as well as deliver the fertilizer they need to grow crops and get their product to market. Commodity prices for corn, wheat and soybeans have already started to climb, although not nearly at the pace of fuel prices.

“Now’s when we need it (diesel) the most,” Curt Hoobler, a Kansas farmer, told CNN affiliate KWCH in Wichita last week. Hoobler is also dealing with the rising cost of fertilizer itself, which is partly supplied from the Middle East.

“It’s going to make it a lot tougher for a farmer to make it through this year,” he said.

– CNN’s Samantha Delouya contributed to this report

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