Shaya Sheikh, Ph.D.
Energy supply chain expert Shaya Sheikh, Ph.D., associate professor at New York Institute of Technology's School of Management, is available to comment on the rise in diesel fuel prices.
Here, Sheikh discusses how higher energy costs could impact inflation:
"Diesel reserves in the United States are currently below their usual levels. This, coupled with various recent developments, has driven an upsurge in diesel prices. The impact of diesel prices on inflation is multi-fold: As the primary fuel used in many modes of transportation, diesel prices can increase transportation costs which leads to higher prices for goods and services. This can contribute to cost-push inflation. Also, many industries rely on diesel-powered machinery and equipment. Increased diesel prices can raise production costs, potentially leading to higher prices for manufactured goods.
"When consumers face higher prices for essential goods due to rising diesel costs, they may have less discretionary income, potentially affecting overall consumer spending and economic growth. Also, observing continued growth in prices can lead consumers and businesses to adjust their behavior, such as negotiating for higher wages, which can fuel inflationary pressures.
"Policymakers will need to carefully monitor the situation and take appropriate actions to manage inflationary pressures while ensuring the stability of the economy."
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