Business
Diesel Crosses $6 Nationwide, Threatening Higher Grocery and Delivery Bills
The national diesel average reached $6.05 a gallon Friday as the escalating U.S.-Iran conflict disrupted oil flows and pushed crude above $100 a barrel. Trucking, farming, shipping and grocery businesses are bracing for another round of cost increases.
WASHINGTON — The national average price of diesel rose above $6 a gallon Friday, adding fresh pressure to truckers, farmers, retailers and American households already facing higher costs for everyday goods.
Diesel averaged $6.05 per gallon, up from $5.85 a week earlier and $3.70 at the same time last year, according to AAA. Regular gasoline also climbed, reaching $4.29 a gallon nationwide.
The latest jump follows a renewed surge in crude oil prices as fighting between the United States and Iran intensifies. Brent crude, the international benchmark, traded above $105 a barrel Friday, compared with about $70 before the conflict. Much of the disruption has centered on tanker traffic through the Strait of Hormuz, a crucial route for global energy shipments.
The squeeze is likely to reach far beyond the fuel pump. Diesel powers the trucks, trains, farm machinery and fishing vessels that move food and other merchandise through the economy. It also fuels some public transit systems and backup generators.
Food is particularly exposed. The Independent Grocers Alliance estimates fuel represents roughly 15% to 30% of the total cost of food. Perishable products such as meat, seafood and produce can feel the impact quickly because they require frequent deliveries, refrigeration and, in many cases, diesel-powered farm equipment.
David Ortega, a professor of food economics and policy at Michigan State University, said retailers and suppliers initially absorb some fuel increases through existing freight contracts and profit margins. But that protection fades as contracts are renewed and fuel surcharges spread.
“More of that cost makes its way to the grocery store,” Ortega said.
July data showed overall U.S. grocery prices up 2.7% from a year earlier, while seafood prices rose 7% and fresh fruit increased 4.9%. Transportation costs are only one factor behind those changes, however. For example, lettuce prices fell after a drop in demand linked to a cyclospora outbreak despite higher hauling expenses.
Shipping companies and online sellers have already begun passing along some of the burden. Amazon introduced a temporary 3.5% fuel and logistics surcharge in April for certain third-party sellers. UPS, FedEx and the U.S. Postal Service also added fees to some shipments earlier in the conflict.
Clothing, cosmetics, furniture and other goods transported by diesel-powered networks could face similar increases if fuel remains elevated. Small businesses that operate delivery vans or depend on regular freight shipments may have fewer ways to cushion the hit than large corporations.
Diesel prices have risen sharply since late February, when the national average stood near $3.76 a gallon, according to AAA. Although fuel costs have been higher in inflation-adjusted terms, today’s prices are already straining household budgets. The previous nominal diesel record, nearly $5.82 a gallon in 2022 after Russia invaded Ukraine, would equal about $6.56 in 2026 dollars.
President Donald Trump has said oil prices may not fall until after the November midterm elections, while warning that the economic effects of the conflict could persist. S&P Global Energy said it does not expect Middle Eastern crude production to return to prewar levels by the end of 2027.
“The market is not returning to calm, it is adjusting to the new normal,” said Jim Burkhard, S&P Global Energy’s vice president and global head of crude oil research. He cited continuing security and logistical problems affecting oil shipments.
For American consumers, that “new normal” could mean higher fuel surcharges, costlier deliveries and more expensive trips through the grocery checkout line — a bill that ultimately lands on families and businesses rather than disappearing through government accounting.