Food prices may rise soon as diesel ‘shock’ bleeds through economy: report

Canadians could wind up with a bigger grocery bill in the coming months as a major price “shock” for diesel and crude oil works its way through supply chains, according to Scotiabank. Crude oil supplies have been particularly strained from the Iran war choking off most shipments through the Strait of Hormuz, while diesel has been in short supply worldwide as Russia, which is a major producer, has seen its diesel refineries and infrastructure damaged by its war with Ukraine.Diesel is crucial for economies worldwide because it’s used to fuel all sorts of vehicles and machinery, including in logistics, agriculture and industry.Scotiabank’s report, released Monday, explains how these spiking diesel and oil prices are expected to be inflationary, and lead to just about everything getting more expensive — including food and shelter.“The Iran war has led to more than a typical oil shock. Diesel prices have risen well beyond what the move in crude would normally imply, adding a distinct and broader layer of inflation pressure to the latest energy shock,” said Olivier Gervais, Scotiabank director of modelling and forecasting, who authored the report. Story continues below advertisement “Die...