Pricey Gas Hikes Costs At Every Turn, Especially On These Staples

ACROSS AMERICA — Starting Wednesday, the skyrocketing cost of gas will make the convenience of having an Uber courier deliver dinner from your favorite restaurant and ordering a ride more expensive.

Other businesses shuttling people also are seeing their profit margins shrink with the increases in the cost of gas. On average, Americans paid $4.32 per gallon Tuesday, according to AAA.

It’ll cost 45 to 55 cents more for an Uber trip, and between 35 and 45 cents more for an Uber Eats delivery, depending on gas prices in each state. The platform’s profits remain “elevated compared to historical trends,” the company said in a news release, but Uber’s temporary fuel surcharge will help out drivers who are feeling the pinch of higher prices at the pumps.

The DoorDash delivery service is giving drivers 10 percent cash back on gas purchases, even when they’re not working. And those who take the most deliveries will get bonuses for up to $15 for 225 miles.

Grubhub drivers’ mileage increased nationwide on March 9, Bloomberg reported, though it did not say by how much. Regional differences in gas prices were taken into account.

Lyft has added a temporary fuel surcharge, too, telling NPR in a statement the money will go directly to drivers. It didn’t say how much more riders will pay, though.

Inflation was 8 percent, a 40-year-high, in the 12-month period ending Feb. 28, according to the Labor Department. With prices increasing across the economy, Uber said it will continue to listen to consumers and its drivers to determine if more changes are needed.

Boston Uber driver Argenis Dominguez told NPR he needs “to use the gas every day for making money,” but said it costs him “a lot, $50 or $60 a day,” to keep fuel in his Toyota Highlander.

Local Businesses Hurt, Too

Among those hurting are places that hire their own drivers such as Avon, Connecticut, pizzeria owner Michael Andrew. He told NBC Connecticut that “gas prices have created an interesting challenge” for his business, E&D Pizza Co.

It’s a trickle-down effect,” he said. “Right now, the immediate impact we’re seeing is the suppliers increasing their prices to the wholesalers who are then increasing their prices down the line to us.”

Andrew hasn’t had to increase the cost of pies, but may have to because he’s facing increased gas price-related costs while also paying delivery drivers.

“We’re keeping our fingers crossed hoping that we don't see $7 a gallon gas because at that point, things become inevitable,” he said.

Airline Costs Could Soar Higher

Just as a road trip is costing more, it’ll also cost more to fly. Costs were already increasing as the travel industry pulled out of the pandemic slump, but steeper increases are likely in the next two or three months since airlines hedge and lock in oil prices—affording them some protection from spikes, industry analysts told The Washington Post.

A 10 percent increase in fuel costs translates to about a 3 percent increase in airlines’ operating costs which could open the door for steeper fares, Robert W. Mann Jr., an industry analyst and aviation consultant, told The Post.

But it depends. Inflation is raising costs at every turn, and “some people will say, ‘I can either fill the oil tank with fuel to heat the house, or I can guy a higher-cost ticket to Walt Disney World to take the family,” Mann told The Post.

That could put pressure on airlines to lower fares, Hayley Berg, the head of price intelligence at Hopper, told The Post.

“But we would expect that if there’s a continuation of a conflict and it does impact oil supply to the U.S. and globally, we would expect higher airfare this summer than we’re forecasting right now,” Berg told The Post.

Some Food Costs 30 Percent More

High fuel prices are also making a trip to the grocery store even more painful than it already was. In the recent 12-month period ending in February, Americans paid 13 percent more for meat, poultry and eggs, 11 percent more for milk, and 8 percent more for fruits and vegetables.

The trickle-down effect Andrew, the Connecticut pizzeria owner, spoke of is at play here, too. Whether plant- or animal-based, agriculture is a fuel-intensive industry that uses gasoline, diesel and other energy from the moment fields are prepared for planting or a cow gives birth in the pasture.

“It’s going to cost us $106,000 more just in diesel fuel to operate at the same capacity as we did in 2021,” Virginia farmer Ben Smith told The National Desk.

All that means food prices could rise even more, by as much as 5 percent in the first half of 2022, The Wall Street Journal reported.

KraftHeniz Co. said in a Jan. 24 letter to customers obtained by CNN Business that it is raising prices on some pantry staples. The most dramatic price increase: It’ll cost 30 percent more for Oscar Mayer turkey bacon. More modest cost increases include:

• Coffee products: 5 percent
• Velveeta Fresh Packs: 6.6 percent
• Cold cuts and hot dog: 10 percent
• Kool-Aid and Capri Sun drink packs: 20 percent

General Mills plans to increase costs on dozens brands, from popular breakfast cereals such as Cheerios, Wheaties, Cinnamon Toast Crunch, Lucky Charms and Reese’s Puffs to other items such as Progresso Soups, Yoplait yogurts, Fruit Roll-Ups, Betty Crocker and Pillsbury.

“There’s nothing immune from price increases,” Tony Sarsam, chief executive officer of food retailer and distributor SpartanNash Co., told
The Wall Street Journal.

One trend to watch: The heavier the vegetable, the higher the freight costs and the cost at the grocery store, supermarket executives told The Wall Street Journal. That means items such as potatoes and celery are likely to get more expensive.

‘Shrinkflation’ Costs You More

“Shrinkflation” is also at play. Doritos bags have five fewer chips, and bag sizes are smaller at 9.25 ounces, down from 9.75 ounces, a Frito-Lay spokesperson told Quartz. But they cost the same.

Wheat Thins boxes are even thinner now, with around 28 fewer crackers. Consumers are also getting fewer M&Ms and less Gatorade — though the maker of the sports drink said the 4-ounce smaller bottles cost more because of the redesign.

“Basically we redesigned the bottle, it's more aerodynamic and it's easier to grab,” a spokesperson for PepsiCo, maker of Gatorade, told Quartz. “The redesign generates a new cost and the bottles are a little bit more expensive … this is only a matter of design.”

Another example of shrinkflation, according to Quartz: You’ll get one less brushing from a tube of Crest 3D White Radiant Mint toothpaste.

Happy Hour Buzz Kill

“Boozeflation” is expected to get worse with rising gas prices, too. Brewers and distillers are already paying more for grain and almost everything else it takes to make their products.

Bracing for the typical pre-holiday stocking of liquor cabinets, Ryan Friesen — the head distiller for Santa Ana, California, Blinking Owl Distillery — and others in the industry held prices at bay to give their customers a break.

“The trend has been to absorb this as long as possible,” Friesen told the Los Angeles Times in December. “That will come to an end. It has to. If we’re absorbing an extra — and I am not kidding — 100 percent increase in our freight costs, for example, we can’t take that hit forever.”

The farther the distance wine, beer and spirits have to travel to get to you, the more they’re likely to cost. One way to save is by supporting local breweries, distilleries and wineries.

The Cost To Keep Clean

Procter & Gamble — which manufactures Pampers diapers, Tide detergent, Gillette razors and a wide range of other personal care and hygiene products — plans to continue increasing prices in 2022.

The consumer-products giant, which saw a 6 percent increase in sales in the fourth quarter of 2021, is betting that demand will remain strong for its products.

“The consumer is very resilient and very focused on these categories of clean home and health and hygiene,” P&G finance chief Andre Schulten said in an interview with The Wall Street Journal.

Procter & Gamble raised prices on 80 percent of products sold in the United States, CNBC reported.