SAN ANTONIO – Two major economic developments hit within 24 hours of each other Wednesday, and experts say San Antonio families could feel the effects at the gas pump, the grocery store, and in their monthly bills.
Diesel fuel crossed $6 a gallon nationally for the first time on record, according to GasBuddy. At the same time, the Federal Reserve raised its benchmark interest rate by a quarter of a percentage point to between 3.75% and 4% — the first rate hike since 2023.
What’s driving diesel prices?
GasBuddy Head of Petroleum Analysis Patrick De Haan attributed the surge in diesel prices to a combination of geopolitical tensions, including disruptions tied to the Strait of Hormuz and the ongoing conflict between Russia and Ukraine. These factors have created a ripple effect across various sectors of the economy.
“Diesel is kind of the default fuel for the economy,” De Haan explained. “Trains, tractors, and trucks all consume diesel. Your next delivery, your restaurant visit, your night out is going to be impacted in one way or another by the rise in the cost of diesel fuel. It’s going to leach into grocery stores.”
Currently, 44 of the nation’s 50 states are experiencing record-high diesel prices, and San Antonio is no exception. De Haan emphasized that significant relief is unlikely until tensions on the world stage begin to ease.
“It’s only improvements or de-escalations in the current issues that would really mean improvement to what consumers are paying,” he stated. “What consumers should be looking for is whether these situations continue to escalate and get worse—which would mean higher prices—or if we start to see some de-escalation, which would reduce risk, allowing oil and diesel to start flowing to the market.”
Truckers are fed up
At the Flying J Truck Stop on San Antonio’s East Side, truck driver Freddy Pagai expressed his frustration with the situation. Pagai, who drives out of Chicago, mentioned that while his company covers his fuel costs, he is aware that these expenses affect consumers in various ways.
“We’ve got to take it. They’ve got the power. We can’t do nothing on it,” Pagai lamented, highlighting the broader implications of rising fuel costs.
“Look at the prices, man. How are you going to do that to the people that are making this country go around?” he questioned. “Without truckers, nobody gets their stuff. And you’re ripping them off? Believe me, every trucker will say the same thing.”
The Fed rate hike adds another layer
The Federal Reserve’s decision to raise interest rates adds another financial pressure point for many families. Jose Moreno, a finance professor at the University of the Incarnate Word, noted that the combination of inflation and higher borrowing costs could create a challenging situation for households that are already stretched thin.
“You have now not only one problem, but you have two problems,” Moreno explained. “The cost is going to increase for you when you buy the products, but also is going to increase the cost of getting that loan to pay for that product.”
Moreno advised consumers carrying credit card balances to expect their interest rates to rise quickly following the Fed’s announcement. He urged San Antonians to be mindful of their spending and to avoid taking on new debt if possible. Small businesses in the region may also feel the squeeze, as borrowing costs for growth and expansion rise alongside everyday operating expenses.
What can you do?
While De Haan noted that consumers have limited options regarding diesel prices, he suggested using apps like GasBuddy to find the lowest fuel prices nearby. The app tracks both gasoline and diesel prices, offering drivers a platform that can help them save money at the pump.
As for the broader economic picture, both experts agreed that the situation warrants close monitoring in the weeks ahead. Staying informed and making prudent financial choices will be crucial for consumers navigating these turbulent economic times.
