At $4.28 per gallon, the average price of regular unleaded gasoline in Delaware reached an all-time high this week, according to AAA.
Drivers across the country are spending more at gas pumps as uncertainty wrought by Russia’s invasion of Ukraine rattles the global energy market. Gas prices are increasing rapidly and no one knows when they will begin to come down.
The average price of gas in Delaware is up 51 cents from a week ago. Gas prices haven’t been this high in the First State since 2008.
“There’s nothing positive coming,” said Ricky Singh, owner of three Speedy Gas locations in New Castle County.
Singh said his wholesale supplier on Wednesday said to expect to charge $6 to $7 per gallon in the coming weeks. Gas prices are dictated in large part by the price of crude oil, the primary raw material for gasoline and diesel fuel. The cost for a barrel of crude oil increased to a 13-year high Sunday, representing a nearly 80% increase from three months prior. Russian oil accounts for about 10% of world supply.
With increased demand post-COVID and inflation, gas prices were rising for the last year before Russia invaded Ukraine. But gas stations are still dealing with many familiar pandemic-era problems, such as a lack of truck drivers and diminished refinery capacity.
THE WAR: As Ukrainians in Delaware watch invasion, there is ‘nothing to do but cry and pray’
Typically, Singh’s supplier will send him the cost of the next day’s gas around 6 p.m. so he can set his prices for the next morning, which then remain on the board the entire day. Now the price of gas is changing by shipment and Singh is increasing prices multiple times per day to keep up.
Since the war in Ukraine began, Singh has run out of gas twice. Most recently, his pumps were flooded by customers when a nearby Wawa increased its price to about 25 cents overnight to $4.25 while Speedy Gas still charged around $4.
His next shipment arrived late and it was more expensive. Soon after, Speedy Gas was at Wawa’s level.
“It’s not the gas station that’s causing the high prices,” Singh said. “It’s certainly not the gas station that’s making extra bucks when the price goes up. We’re just the last stop. We’re the face of gas.”
Here are a few other ways experts predict increased fuel costs could affect consumers.
Increased grocery prices
Increased delivery costs are ultimately passed on to the consumer, but it’s too early to tell the full effect.
Grocery prices have already been rising during the COVID-19 pandemic.
“Everything is costing more right now,” said Joe Little, general manager of the food redistributor Dot Foods, which supplies food services like U.S. Foods and Sysco as well as mom-and-pop sellers. “We’re seeing increased cost pressure across the board, literally in every area from labor, utilities, it’s there. Nobody wants to increase prices but there’s really not a lot of choice right now.”
A Bloomberg survey of economists called the Fresh Consumer Price Index estimated prices in the year through February have risen 7.8%, which would be the fastest pace of inflation in four decades, according to the New York Times.
GROCERY PRICES: Grocery stores feel effects of supply chain pressure
Fuel surcharges on trash collection
Many customers pay a fuel surcharge to trash collection companies tied to the average price of diesel.
Those surcharges, a percentage of a customer’s monthly bill, are going up.
Last week, Waste Management added a 21.74% collection surcharge, up about 6% from last March. Another company, Trash Tech, had a surcharge of 18.97% as of Feb. 28.
Fewer rideshare and delivery drivers
Karla Bowers delivered food for DoorDash until Tuesday when she decided the tips she received weren’t enough to outweigh the cost of gas and the time she spent driving.
“Sadly my vehicle doesn’t run on ‘thanks,’ ” she said.
She was one of several drivers for rideshare or food delivery services that told Delaware Online/The News Journal they were giving up on the gig or taking a break with fuel costs rising.
Other delivery drivers said they are being more selective in the trips they accept, sticking to shorter routes or orders with tips included.
“I will not deliver low-ball orders,” another driver said. “Not worth it!”
The cost of air travel
With travel demand returning after years affected by the pandemic, analysts don’t expect airlines to cut capacity in response to rising fuel costs, but the increased expenses could lead them to up prices.
Cowen & Co. airline analyst Helane Becker expects around a four-month delay before fares align with the surge in fuel costs, according to CNBC.
Flights from the New Castle Airport to Orlando on Frontier this month range from $38 to $87.
Contact Brandon Holveck at bholveck@delawareonline.com. Follow him on Twitter @holveck_brandon.
