At $3.82, Gas Prices Take New Inflation Toll

The average price for a gallon of gas rose to $3.82 nationally Tuesday, 60 cents higher than at the start of 2023—and the highest amount so far this year, The Wall Street Journal reports.

A big reason why oil and gas prices stayed under $3.60 earlier this year was China’s weak economic recovery. However, Russia and Saudi Arabia, by limiting production, have managed to bring oil back up to $80 a barrel.

These higher energy prices are likely to complicate the Federal Reserve’s fight to bring inflation back down to its 2% norm.

Already, higher fuel costs are impacting near-term inflation on labor and credit card fees, economists said. Elevated inflation’s biggest toll right now is on small business owners, who are raising their prices or delaying hiring extra help.

The Moving Company of Springfield Mo., lost three drivers who found their driving commutes getting prohibitively expensive, said Will Wheeler, a controller at the company.

As a result, The Moving Company already raised its mileage charge by $4 and may raise it further to $7, Wheeler said.

Codi King, a hairdresser in Tennessee who drives 160 miles a day to meet with clients in their homes, raised her styling rates by $25 to $225 earlier this year and began charging customers beyond a 25-mile range a $40 travel fee.

King is thinking of charging $250 for a haircut or hairstyling, adding she is “just aggravated that inflation is so high right now.”

Likewise, Brown Brothers Catering in Orem, Utah, has postponed upgrading to more efficient ovens or hiring extra help because, while food prices have stabilized, higher gas prices are eating into the company’s bottom line, said Tony Black, a sales manager.

“It’s certainly a delay on our ability to grow,” Black said.

“We’ve lost a lot of business,” Wheeler added.