Fuel Prices Squeeze Workers and Small Businesses
Surging fuel prices driven by the Iran war are forcing Americans to rethink how they commute, shop, and run their businesses. The national average for a gallon of gasoline topped $4this week, according to AAA (the American Automobile Association) , while drivers in California face prices approaching $6per gallon, with some Los Angeles stations charging as much as $8. In response, major logistics companies have introduced fuel surcharges: Amazon announced a 3.5% levy on third-party sellers starting April 17, FedEx and UPS (United Parcel Service) have imposed surcharges exceeding 26%, and the US Postal Service plans an 8% surcharge on certain packages beginning April 26.
The International Energy Agency (IEA) has described the conflict's impact on oil supply as the largest disruption in global market history. Roughly half of what consumers pay at the pump covers the cost of crude oil, with refining, taxes, and retailer margins making up the remainder. Gas station operators say their own margins have actually shrunk, as wholesale prices fluctuate multiple times daily and retailers struggle to pass increases on quickly enough. In California, a mandatory seasonal switch to a cleaner but costlier summer fuel blend adds further pressure. For online sellers, the logistics surcharges compound existing tariff burdens, creating what one financial analyst called potentially the final straw for businesses already operating on razor-thin margins.
Ordinary Americans are finding creative ways to cope. In Los Angeles, a grocery store worker earning $20an hour stretches his fuel by shifting into neutral on highway downhills, while a music manager has switched to commuting by motorcycle several days a week. A small car service owner near LAX (Los Angeles International Airport) is relying more heavily on her two electric vehicles but worries that raising fares could drive away loyal customers. Supply chain experts estimate that 30% to 40% of Amazon's third-party sellers will eventually pass surcharges on to consumers, meaning higher prices on everyday household items from laundry detergent to toilet paper. Airlines have not yet added direct fuel surcharges to tickets, but JetBlue and United have already raised checked bag fees, while DoorDash has launched an emergency relief program to help its delivery drivers weather the crisis.