Fuel costs may drive grocery prices up
Iran war hits diesel used from farms to stores
By: Daniel Munoz
NorthJersey.com
USA Today Network - New Jersey
..... Mark Nieves has been driving trucks for 40 years, making deliveries from the Port of Elizabeth in New Jersey.
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Now, amid a U.S.-Israeli led war with Iran that closed a vital waterway connected to the Persian Gulf that is used to move fuel, Nieves has seen his diesel bill increase from $400 a week to $600 a week.
..... "It's gong to affect everyone,because it's going to continue to go up," he aid in a phone interview on Friday March 20. [2026] Diesel has "gone up $2, which means your groceries are going to go up."
..... Diesel prices surged as the Iran war entered its third week, after U.S.-Israeli strikes killed Iran's supreme leader, Ayatollah ali Khamenei.
..... Iran responded by closing the Strait of Hormuz, a narrow waterway between the Persian Gulf and the Gulf of Oman bordered by Iran, through which 20% of the world's oil and natural gas passes.
..... In Truth Social post on Monday, March 23, [2026] however, President Donald Trump announced that peace talks with Iran were progressing, hours after saying he gave Iran a 48-hour deadline on Saturday [03/21/2026] to reopen the heavily-traveled Strait of Hormuz. He said Monday [03/23/2026] that he would delay military strikes on Iran for five days.
..... His comments sent oil prices plunging 8%. but at the gas pumps prices are still pushing $4 a gallon. They were $3.88 as of Monday, [03/23/2026] according to travel club AAA, companied with $3.86 on Sunday, [03/15/2026] last week and
$3.92 a month ago. [02/28/2026]
..... "Volatility is likely to remain high," Patric De Hann, head of petroleum analysis at GasBuddy.com , said in a March 23 [2026] post. "traders will be weighing not only the credibility and duration of the pause, but also the risk that tensions could quickly re-escalate if negotiation falter."
..... Fuel data from the motorists club AAA showed that diesel was $5.40 as of Monday, [03/23/2026] compared with $5.35 on Sunday, [03/22/2026] $5.04 a week ago [03/15/2026] and $3.91 a month ago. [02/28/2026]
..... The peak for a gallon of diesel was $6.33 in 2022m amid 40-year-high inflation and Russia's invasion of Ukraine, which upended global oil markets.
..... "Diesel is the world's fastest-growing product," said Tom Kloza, a senior energy adviser at Gulf Oil.
..... Data from the federal Bureau of Trucking Statistics shows that in 2024, truckers moved over 3.1 billion tons of food within the United States, ranging from meat and seafood to alcohol and grains. Diesel's price increases will have a cascading effect that ultimately leads to higher prices on the grocery shelves - an economic pain point for already cash-strapped Americans.
..... "A loaf of bread requires diesel to harvest the grain, move the grain to a mill, move the flour to a bakery, and move the brad to the store," said Keven Lyons who leads the Rutgers Center for Local Supply chain Resiliency in Newark. [NJ] "Every leg adds a new surcharge."
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The effects won't be immediate, Lyons said in an email. Right now, the impact is begin felt primarily by truckers, who might opt for shorter-haul trips. Truckers are allowed to tack on a fuel surcharge based on federal data, but there's typically a week's lag, Lyons said.
..... If diesel jumps $0.80in four days, as seen in early March, [2026] "the truckers pays the cash out of pocket immediately," he said.
..... Diesel is used for farming and factory work that also puts groceries on the shelves, Lyons said.
Passing along cost increases
..... Once the conflict has lasted a month, things will start to change.
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"Retailers will raise the price of 'High-volume, Low-Weight items (like chips) and "Heavy-Necessities (like milk and water) first," Lyons said. "Sometimes, instead of a price hike, you'll see the 'Value Pack" get slightly smaller to keep the price at a psychological $4.99 barrier."
..... "I can promise you that any cost increases will surely get passed on to the consumer," said Doug Stephens, founder of Retail Prophet, a shopping consultant website.
..... And it's not just moving food around, Diesel "plays a good role in food production as well," said Mark Schieldrop, a spokesperson for AAA Northeast. It's also used in the plastic packaging for food, he said.
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Companies across industries are following up with their own fees that will likely dribble down to consumers, experts said. Package delivery company UPS shipping giant Maersk, chemicals firm Ecolab and airlines Cathay Pacific and Air India have all announced fuel surcharges since the United States and Israel launched attacks on Iran.
..... "We expect more such announcements until oil prices cool meaningfully from four-year high," Pavel Molchanov, a Raymond James investment strategy analyst, said in an email to NorthJersey.com reporting partner USA Today.
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The ware has already led to surge in gas prices that motorists pay at the pump. AAA data shows that the average price of a gallon of gas on Friday [03/20/2026] was $3.82, up form $3.53 a week ago [03/13/2026] and $2.92 a month ago. [02/28/2026] The last time gas prices were above $4 a gallon was in 2022, said GasBuddy.com . the record high price was $5.05 a gallon in June 2022.
..... This article contains material form USA Today.