Forget about high gas prices. It’s record-breaking diesel that America is now starting to fret about.

Lawmakers and economists have turned a more critical eye to all-time-high diesel prices in recent weeks, which remain on a record-shattering streak even as oil and gas prices have cooled. Crude crude has pulled back from $100 a barrel, but diesel prices rose to a fresh record-high on Tuesday, clocking in at $6.52 a a gallon, according to AAA data.

It marks a 77% increase from a year ago, compared to a 40% increase in the average price of a regular gallon of gas and a 32% increase in the price of Brent crude in that time.

There are a few reasons the rise in diesel has been more pronounced. Oil prices are largely being driven by a bottleneck in crude supplies coming out of the Strait of Hormuz. But diesel, which is a petroleum byproduct, is mostly being influenced by reduced refining capacity, given recent attacks on energy infrastructure attacks in the Middle East and Russia. Collectively, diesel exports from the Middle East and Russia were down 75% year-over-year in August, according to the International Energy Agency.

Diesel gets less attention than consumer-facing gas prices, but the fuel is the backbone of the US economy, given its importance to shipping, agriculture, construction, and mining. Diesel is the primary fuel for large commercial trucks, which transport everything from food to equipment to “nearly all products people consume,” per the Energy Information Administration. It also indirectly accounts for around two-thirds of farm and construction equipment, top economist Paul Krugman wrote in a note on Substack on Monday.

“Never mind crude oil; distillates are the problem now,” the Nobel economist said, adding that higher diesel prices more directly impact inflation and are more likely to prompt the Fed to raise interest rates compared to higher gas prices. Lower borrowing costs have also been a prominent economic goal for President Donald Trump.

In a recent note to clients, analysts at Bank of America called diesel prices the “key real-economy pressure point.”

Supply bottleneck is ‘a total mess’

The Trump administration and legislators have recently turned an eye to the diesel crisis.

Republican lawmakers are calling for a 90-day ban on US diesel exports, an action that, in theory, could help reduce supply pressures and lower diesel prices in the US.

Trump, meanwhile, has pressed Ukraine and Russia to end their yearslong war, which has impacted Russian oil refineries that add to the world’s diesel supply.

“Russia has unfortunately lost control of its Diesel Oil Industry due to its War with Ukraine,” Trump wrote in a Truth Social post on Monday, adding that the “whole World” was suffering as a “large number” of diesel refineries were being taken out.

Separately, Trump also pressed Ukraine’s president to stop attacking Russian refineries in a phone call that was mainly about “diesel, diesel … diesel,” sources told The Financial Times this week.

“You can see the president has tuned in that the problem is diesel, not how much oil Saudi is getting out,” Paul Sankey, a longtime energy analyst and the president of Sankey Research, told Bloomberg on Tuesday.

There is no easy solution to bringing down diesel prices. An embargo on diesel would lower diesel prices in the US, though refiners could slowly wind down diesel production as margins fall, raising prices down the line, Sankey said. A diesel export ban could also result in a supply “disaster” for places like Europe, he added.

“It’s a total mess,” Sankey said of the diesel situation.

Hardika Singh, an economic strategist at Fundstrat Research, flagged the possibility of $7 diesel on the horizon as supply pressures mount.

“Diesel prices have shot up to records, leaving the economy and stock market vulnerable to unraveling,” she wrote, referring to the potential impact on inflation and interest rates.