There’s little pain relief at the pumps these days, especially as the price of diesel has almost doubled in the last year.
Diesel now averages $2.29 per liter across Canada, and is even more expensive than premium gasoline. In the last month alone, the liter of diesel has risen 35 cents.
Some are stuck having to grin and bear it, like Peter Ruiter, an Ottawa dairy farmer who relies on diesel to run his farm equipment.
“The reality is I can’t farm these fields by hand, there are too many acres to do,” he said.
Rising fuel prices are another blow to consumers struggling with rising costs of living, as inflation reached a level in March not seen in decades.
And the skyrocketing cost of diesel means that transporting goods has become more expensive, as diesel, which is generally more efficient and cheaper, powers the trucks, trains and some of the ships that our supply chains depend on. .
The Russian invasion of Ukraine has caused a sharp increase in the prices of raw materials, including crude oil. Many countries have introduced sanctions on Russia, which is a major exporter of oil and natural gas. At the same time, the demand for fuel is increasing as economic activity recovers around the world.
“There has been a shortage of diesel globally, which means inventories are [at an] historic low. I’ve never seen inventories this low,” Vijay Muralidharan, a senior consultant at Kalibrate, an analytics firm that tracks fuel prices.
Another part of the reason diesel prices have soared in North America is due to record exports from the US Gulf Coast. Most of the fuel is destined for South America, where countries they are burning diesel for electricity as hydroelectric power supply drops during the southern hemisphere winter season.
There is an increased reliance on diesel in some of those countries this year, Muralidharan said, due to reduced supplies of natural gas.
It also comes at a time when more and more families need assistance, said Emily-anne King, co-executive director of Backpack Buddies, an organization that supplies food to more than 4,000 children in British Columbia.
“It’s really alarming for us to see these price increases,” King said. “Failure to comply is simply not an option… We have made these commitments and will continue to find ways to get there and be there for the families and children we support.”
The organization itself is feeling the pinch of astronomical diesel prices, as costs rise to deliver food across the province to families struggling to make ends meet.
“These last few weeks, we have felt more pressure and we have received more calls from communities and individuals who need support,” he said. “And it’s just not slowing down.”