Iran War Drives US Gas Prices Higher
Rising fuel costs linked to the Iran war are changing how Americans travel, shop, and do business. The national average price of gasoline passed $4per gallon this week, as reported by AAA (the American Automobile Association) . In California, drivers are paying close to $6per gallon, and some stations in Los Angeles are charging up to $8. Major delivery companies have responded with fuel surcharges. Amazon announced a 3.5% charge on its third-party sellers, while FedEx and UPS (United Parcel Service) have added surcharges of more than 26%.
The International Energy Agency (IEA) has called the conflict's effect on oil supply the largest disruption in global market history. About half of what drivers pay at the pump goes toward crude oil costs, with the rest covering refining, taxes, and retailer margins. Despite higher prices at the pump, gas station operators say their profits have actually fallen because wholesale costs change rapidly throughout the day. In California, a required switch to a cleaner summer fuel blend adds even more to the price.
Everyday Americans are finding ways to deal with the situation. In Los Angeles, one worker saves fuel by coasting in neutral on downhill stretches of highway, while a music manager now commutes by motorcycle several days a week. A small car service owner near LAX (Los Angeles International Airport) depends more on her electric vehicles but fears that raising fares could push away customers. Supply chain analysts estimate that 30% to 40% of Amazon's third-party sellers will eventually pass their surcharges on to shoppers, leading to higher prices on household products like laundry detergent and toilet paper.