Share to ClassroomIran War Drives US Fuel Prices Higher
Rising fuel prices caused by the Iran war are pushing Americans to change how they travel, shop, and do business. The national average price of gasoline passed $4per gallon this week, according to AAA (the American Automobile Association) . In California, drivers are paying close to $6per gallon, and some Los Angeles gas stations are charging up to $8. Amazon added a 3.5% fuel surcharge on third-party sellers starting April 17. FedEx and UPS (United Parcel Service) have introduced surcharges above 26%, and the US Postal Service plans an 8% surcharge on some packages from April 26.
The International Energy Agency (IEA) has called the war's effect on oil supply the largest disruption in global market history. About half of what people pay at the pump covers the cost of crude oil, with refining, taxes, and retailer profits making up the rest. Despite higher prices, gas station operators say their margins have actually decreased because wholesale costs change several times a day. In California, a required seasonal switch to a cleaner but more expensive summer fuel blend creates additional pressure. For online sellers, shipping surcharges add to existing tariff costs, which one analyst described as potentially the final straw for businesses with thin profit margins.
Everyday Americans are finding creative ways to cope. In Los Angeles, a grocery worker stretches his fuel by coasting in neutral on downhill stretches of the highway. A music manager now commutes by motorcycle several days a week. A small car service owner near LAX (Los Angeles International Airport) relies more on her electric vehicles but fears that raising fares will lose customers. Experts estimate that 30% to 40% of Amazon's third-party sellers will eventually pass surcharges on to consumers, raising prices on household products.
