Spike in cost of diesel threatens consumer wallets, global supply chain: experts

While the spike in the price of gasoline is squeezing consumer budgets, the skyrocketing price of diesel could soon have consumers digging even deeper into their pocket.

While the war in Iran has sent gasoline prices soaring around the world, there are growing concerns about how the spike in the cost of other fuels could also affect consumers and the broader economy.

In Canada, the average price of diesel has surged to nearly $2.30 per litre — more than 50 per cent higher than just three months ago.

“It’s unprecedented. We’ve never seen anything like this in the oil market or the refined products market and it’s getting worse,” said Calgary-based petroleum industry analyst Richard Masson.

“The tankers that left four weeks ago just before the war started are just starting to unload at their destinations,” he continued.

About 13 million barrels of oil per day normally move through the Strait of Hormuz at the mouth of the Persian Gulf — one of the busiest and most strategically significant shipping routes in the world and a key oil choke point — about 25 per cent of global oil shipments.

The closure has disrupted oil and gas shipments from the region and rattled markets around the world.

“It takes three to four weeks to get where they’re going, but over the last four weeks there have been no tankers leaving out of the Strait of Hormuz.

Masson said the refined products market is experiencing prices like $200 a barrel for diesel fuel.