▲ Diesel prices at a gas station in California, US
A major obstacle—surging diesel prices—has hit U.S. President Donald Trump and the Republican Party as they solidified their resolve to win the midterm elections through their party convention.
Wrapping up the Republican Party's first-ever midterm nominating convention, President Trump appealed to party members and voters to participate in the vote, stating, "We vow to vote on November 3" (the midterm election day), according to local time the day before yesterday (the 10th).
However, coincidentally on that very day, U.S. diesel prices, which exert a broad impact on inflation sentiments, set a new all-time high.
Oil price information firm GasBuddy announced that the nationwide average diesel price surpassed 6 dollars per gallon for the first time ever.
The American Automobile Association (AAA) also reconfirmed that the average retail price of diesel reached 6.06 dollars per gallon on the 11th.
Compared to 3.71 dollars per gallon during the same period last year, this represents a 63.3% surge.
It is the first time that the average price of diesel sold at U.S. gas stations has exceeded 6 dollars per gallon.
Diesel is the fuel for trucks and trains, which are major modes of transportation within the United States.
In particular, rising fuel costs for trucks transporting goods to every corner of the country drive up the prices of groceries and everyday necessities.
According to the Associated Press, the National Grocers Association, comprising 7,500 supermarkets worldwide, estimated that fuel costs account for approximately 15% to 30% of grocery prices.
In the recently released July price index, overall grocery prices rose 2.7% compared to the same month last year, while seafood prices, which require refrigerated and frozen transport, surged 7.0%, and fresh fruit rose 4.9%.
Amazon, the largest U.S. e-commerce company, has begun imposing a 3.5% fuel surcharge on some sellers following the war.
FedEx, UPS, and the U.S. Postal Service (USPS) also started levying extra fees on certain delivered parcels.
Diesel prices affect not only transportation costs but also production costs.
This is because diesel is used in agricultural machinery that grows and harvests crops, as well as in fishing boats that catch marine products.
Diesel is also used for heating and power generation in some regions.
Furthermore, as it is used as fuel for construction heavy equipment and public transportation such as buses, the rise in diesel prices spills over into increases in other costs.
Bloomberg News forecasted, "This issue could become decisively important in Maine, which has the highest proportion of households using heating oil for home heating in the country, and in agricultural states ahead of the harvest season, such as Ohio, Kansas, and Iowa."
Maine, Ohio, Iowa, and others are cited as "battleground" states in the federal Senate elections.
Diesel prices exceeding 6 dollars per gallon in these regions will inevitably work to the disadvantage of Republican candidates.
While diesel and gasoline prices have become an urgent crisis for the midterm election landscape, Bloomberg pointed out that President Trump has virtually no clear policy tools other than releasing the Strategic Petroleum Reserve.
With bottlenecks in energy transportation persisting in the Strait of Hormuz and the Bab el-Mandeb Strait in the Middle East, compounded by Ukrainian strikes on Russian oil refineries, fundamental problems in supply and demand remain unresolved.
Kevin Hassett, White House National Economic Council Director and economic advisor to President Trump, appeared on Fox Business that day and said that diesel prices are a "matter of major concern."
(Photo: AP, Yonhap News)
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