By Jared Mitovich and Jeanne Whalen
Long-haul trucker Miguel Caveda recently spent around $1,800 on diesel fuel during a week on the road, about 40% more than he typically paid before the Iran war began.
The sudden surge in diesel prices has eroded Caveda's profit and upended his business in other ways, too. He has started searching out lighter hauls and avoiding hilly routes that guzzle fuel. He is also keenly aware that the steeper fuel costs will eventually trickle into the prices consumers pay for goods he is carrying -- from tires to watermelon -- assuming his business survives.
"Any major repair, like, god forbid an engine failure or anything like that, I'm out of the business," the Tampa, Fla.-based trucker said in an interview from a rest-stop in Charlotte, N.C., where he was transporting a load of empty bottles. "I'm out."
The average gallon of diesel crossed $5.20 nationwide on Saturday, up around 40% from a month ago, according to the AAA. Eight of the 10 states where diesel prices have shot up most compared with a month ago are in the Southeast -- led by South Carolina, where prices have risen 51% since Feb. 21 and where Caveda paid $853 alone for 161 gallons at a station in Columbia on Monday.
Caveda and other small truck drivers -- many who own their rigs and foot their fuel bill themselves -- are feeling some of the first economic effects of the rapid surge in the cost of diesel, which is primarily produced from oil and generally more expensive than gasoline.
Higher diesel prices for a sustained period would, however, ripple throughout the broader supply chain and could lead companies to eventually increase the price of consumer goods, economists say.
The price of diesel and other oil derivatives affect the cost of "many, many things," said Federal Reserve Chair Jerome Powell on Wednesday. The effects on core inflation, which excludes food and energy, are "real, and they're material," he added.
For most freight companies, a 40% surge in the price of diesel results in an overall cost increase of around 10%, said Erich Muehlegger, an economist at the University of California, Davis. The diesel price spike from Russia's invasion of Ukraine in 2022, for instance, contributed to a significant increase in the cost of milk for consumers in California, according to UC Davis research.
Diesel is also used to power machinery used by the fishing, farming and construction industries, such as tractors and cranes. The higher costs those companies are beginning to pay won't be felt by consumers immediately, but they have already begun to pass through the supply chain, Muehlegger said.
Companies looking to ship fresh food are more vulnerable as their products have to be refrigerated and transported quickly, so they can't wait until prices come down, said Michael Adjemian, an economist at the University of Georgia. As a result, farmers will begin to charge more on the wholesale side, and the retailers who depend most on their products and can't easily substitute them will charge consumers more, Adjemian said.
Other companies looking to transport consumer-packaged goods with less immediate demand might wait to ship them until the price spike subsides, or send their goods via train, which can take longer but uses less diesel.
In the near-term, this type of fuel surge could knock many small truck drivers out of business, straining the available capacity for shipping the same quantity of goods, said Avery Vise, vice president of trucking with FTR Transportation Intelligence.
The surge also affects larger freight carriers, many of which can by contract pass along added costs to the companies whose goods they are moving. That still presents a financial risk, because companies often pay their freight bills around 30 to 60 days after shipments, while the carriers pay the higher costs upfront, Vise said.
For Caveda, the Florida trucker, the rapid increase has strained his business and pushed his time-tested money-saving strategies to their limit.
He is turning his truck off as much as he can, hunting on his phone for the gas stations where he can use his company's fuel discount cards, and avoiding routes that take him through places like West Virginia, where the rolling hills quickly chew through his fuel. But those steps only save $100 a week, at most, and haven't stopped his credit-card debt from creeping to just below his $28,000 limit.
"You just have to pray you get a light load," he said.
Aram Honore, who runs a small trucking business with two other drivers based in Sun City, Ariz., has become more selective with his freight since the cost of war began showing up at the diesel pump. He is opting for longer-haul treks, which open him up to landing more work, and avoiding taking any trips where he isn't certain he will have a job to support his return home.
"Two weeks ago, I might have taken a random road to Florida, taking the chance that when I get there, I'm going to find someone coming back," said Honore, who typically hauls freight such as auto parts and dried food in a 26-foot box truck. "Now, I can't take that chance."
The last time prices were this high was in 2022, following Russia's invasion of Ukraine. But Honore noted that prices moved upward more slowly in the early days of that war: "It's one thing when fuel prices go up. It's another when it spikes."
Erik Hagerling, an independent trucker based in Michigan, said the diesel price increase has cost him an extra $300 to $400 a week. Early this month, while buying 210 gallons in Ohio, he snapped a picture of the diesel pump as it crossed over $1,000. "This is insane," he captioned the photo in a social-media post.
Hagerling says he is now trying to focus on driving for customers that are willing to pay a surcharge to cover at least some of the extra fuel cost. "It takes some of that pressure off," but "we still have to eat some of it," he said.
Write to Jared Mitovich at jared.mitovich@wsj.com and Jeanne Whalen at Jeanne.Whalen@wsj.com
(END) Dow Jones Newswires
March 22, 2026 10:00 ET (14:00 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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