Diesel Shortage In The US: Exaggeration or Fact?

YEREVAN (CoinChapter.com) – On Oct 14, the US Energy Information Administration (EIA) reported that the country had approximately a 25-day supply of diesel fuel in its reserves. So, how does the government plan to deliver the Thanksgiving turkeys to a store near you?

Moreover, is the panic an exaggeration of how dire the situation really is? And, finally, how will the fuel shortage affect the average citizen?

Fuel Shortage In The US: Exaggeration or Fact?

While gasoline prices have moderated since hitting their record high in June, the price of diesel fuel has stubbornly remained above $5 a gallon. “America is running out of diesel fuel.” This narrative has flashed through several US publications in the previous two weeks.

As mentioned, the latest EIA report claimed that supplies of distillates, including jet fuel and heating oil, as well as diesel fuel – are at their lowest levels since 2008. Andy Lipow, the president of Lipow Oil Associates, commented on the shortage in an interview with CNBC.

The national average price for diesel today is $5.30 per gallon and is expected to go up 15 to 20 cents in the next few weeks.

said Lipow.

The expert also added that the diesel supply hadn’t been this low since 1951.

The statistics say that the diesel shortage is real. However, the officials told the public and businesses not to panic buy fuel, which could create artificial shortages.

U.S. refining capacity is now lower than it was before Covid, as operable refinery capacity shrank in 2021 for a second consecutive year to stand at 17.9 million barrels per calendar day as of January 1, 2022, according to EIA estimates.

How Does The Fuel Shortage Affect An Average Household?

It doesn’t take long to deduce how the diesel shortage will affect the broader economy and the average household. Moreover, the adverse effects trickle down to every citizen, regardless of the cars they drive or the products they buy.

The higher cost of diesel fuel makes every truckload of groceries more expensive to deliver, costs that eventually will be reflected in higher prices at the checkout counter in Whole Foods and Walmart alike. Not to mention, distillate fuels are used in transportation, agriculture, manufacturing, and heating.  

Panic Might Be Worse Than The Actual Diesel Shortage

However, another underestimated factor is panic. Once people get a whiff of a possible shortage, they start storming the stores and buying up everything they can get their hands on. The latter was sadly confirmed by consumer behavior during the Covid-19 supply chain breakdowns.

Meanwhile, government officials are reluctant to confirm or deny the possible outcomes. White House spokesman, John Kirby, did not give the press a definitive answer during the press conference on Oct 26.

The president has been working very hard to make sure that not only are we ready for fluctuations that could come […] but that we are also doing what we can to help our European friends and partners who are also going to be facing a long, cold winter. 

said Kirby.

The Spokesman also asserted that the US “doubled its commitment” for natural gas exports to Europe. However, the denial drove another nail in the coherency coffin between the Democratic Party and the Republicans.

Many Republican representatives believe that US President Joe Biden mishandled the war in Ukraine and drove his own country to the brink of fuel shortages and a subsequent recession. And while the US official squabble among themselves, the global community might face a food supply shortage on top of the diesel bottlenecks.

Is The War In Ukraine The Root Of All Evil?

Russia’s invasion of Ukraine on Feb 24, 2022, hit the global economy like an asteroid. The war destroyed not only what was left of peaceful negotiations between NATO and Russia but also trickled down to every household in Europe and the US through skyrocketing fuel prices.

The Biden Administration pins the diesel shortages on Putin himself and the war he started. Meanwhile, the opposing party prefers to point the finger at Biden and the “religious crusade” he is fighting in Ukraine.

Withdrawal of Russian gas and oil from the European market exacerbated the recession fears and led President Biden to the decision to ‘help the allies’ and ‘fight for democracy.’ However, the banner slogans ring hollow in the average homes, which are not fit to swallow the cost of US interference in Ukraine.

So was the US response inadequate? Was there another way out?

Last But Not Least: Was The Western Response Adequate?

Does the war in Ukraine undermine US national security? This seems to be the central question for an average citizen. Tulsi Gabbard, a former United States Representative, blamed the US involvement in the Ukraine war on the Military Industrial Complex.

The latter describes the relationship between a country’s military and the defense industry that supplies it, seen together as a vested interest that influences public policy.

What we are seeing play out now is essentially a proxy war. The US is at war with Russia, using Ukraine as its military. […] The ultimate objective is regime change with Russia, as the anti-Russian objective has been building up for years.

commented the politician.

It is clear that the war in Ukraine is not fought between Russia and Ukraine. Larger players, such as the US, Europe, China, etc., have their own agenda, and they are determined to see it through.

However, while governments are toying with the nuclear buttons, taxpayers across the globe face a harsh reality: shortages of all kinds. Will the diesel shortage and food shortage build, or will the leaders succeed in defusing the situation? We’ll have to wait and see.