GRAND RAPIDS, Mich. — West Michigan is already seeing record diesel prices, and a GasBuddy analyst says the economic pain may be just getting started.
Patrick De Haan, an analyst with GasBuddy, said every day the Strait of Hormuz remains closed, the economic outlook grows bleaker. The warning comes as Michigan drivers are already feeling the pinch at the pump — and at the grocery store.
On Monday, the average price for a gallon of diesel in Michigan hit $6.01, according to AAA.
De Haan said the closure of the strait is already rippling through the broader economy. Spirit Airlines last week abruptly shut down operations, citing rising jet fuel prices as a final straw in the decision. De Haan said that the announcement may be only the beginning of the economic pain.
"There's nothing that can stop a big jump in the price that you're paying at the grocery store. It's likely, I mean, even if the Strait reopens tomorrow, you're still talking about a huge expense. So the freight train is gaining momentum, and that inflation is going to start ramping up rapidly," De Haan said.
De Haan said elevated diesel prices will eventually filter through to nearly everything consumers buy — and West Michigan farmers could be among the hardest hit.
"The worry is that it takes a couple of months for those diesel prices to filter down to the grocery store. But you know, farmers in West Michigan are going to be getting hit hard by fertilizer, by diesel, we could see an economic recession in the third or fourth quarter if we don't see the Strait reopening," De Haan said.
De Haan also warned that even after the conflict ends, more countries may seek to build their own strategic oil reserves to reduce dependence on the strait for future fuel supply — a move that could drive oil prices higher once again.
There is some relief in sight for drivers this week. Refinery issues in the Midwest have been resolved, and gas prices are expected to see a slight dip. Drivers looking to save money may want to wait until later in the week to fill up, as prices are expected to continue reflecting that decrease.
Here’s a look at what drivers are paying, county by county, across West Michigan as of 6:30 a.m. Tuesday:
- Kent County: $4.92 per gallon
- Muskegon County: $4.79 per gallon
- Ottawa County: $4.86 per gallon
- Kalamazoo County: $4.95 per gallon
