While higher oil prices are translating into higher gas prices, truckers are being hit especially hard, and the costs are being passed onto consumers.
Faustino Pazos was just topping off his tank Thursday morning on Chicago’s Southwest side. The cost ttotaled up to $169 for 32 gallons of diesel fuel.
The average price in Chicago, according to the AAA, is $5.37 a gallon, up more than a dollar from just a month ago. Pazos said he regularly spends $200-300 to fill up his truck.
“In the city of Chicago, it’s a headache,” he said. “Fuel prices are murder.”
Since the beginning of the war in Iran, residents are beginning to see impacts across the US economy according to former Biden administration economic policy advisor Michael Negron.
“The closure of the Strait of Hormuz is leading to spiking shipping, fertilizer, and aluminum costs, which will combine with higher energy prices to raise prices across the economy, from the costs of groceries to airline tickets to utility bills and more.,” he said.
“Energy runs through everything in our economy,” added Dan Varroney, an economic strategist and author of “Rethinking Economic Growth. When the price of it goes up, we pay for it. When energy goes down, we don’t pay as much for it.”
The cost of diesel is factored in the price of many goods. One example: the produce that Faustino Pazos delivers. It started on the farm, then was transported to a facility for packaging or processing. Then it was sent to another warehouse for distribution before being delivered to your local store.
Almost every step in the process involves a trip in a truck.
Varroney said an end to the war will likely bring down energy prices, and in turn, the cost of food and other goods, but not immediately. He said we could see some price relief 6-to-12 weeks after the end of hostilities and the re-opening of the strait.
However, he is cautioning that consumers may not see any real price reductions until the end of the year.
That means the high prices brought on by the cost of diesel fuel will be with us for a while.
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