President Donald Trump announced on Monday that he wants to suspend the federal gas tax to help offset the high cost of fuel due to the war in Iran.
The tax is 18.4 cents a gallon for normal gas or 24.4 cents a gallon for diesel.
Fuel prices are not just hurting your wallet at the pump, it’s also raising the price of other products we buy. On News Center 7 Daybreak, we broke down how the pain at the pump is hurting the bottom line for many businesses.
Gas prices are hitting nearly $5 a gallon in Ohio, and higher in some other places around the country, meaning every driver is paying more at the pump, and most others are also paying more out of pocket.
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Farmers, ranchers, and fishermen are feeling the pinch as fuel costs, specifically diesel, spike, forcing them to pass on higher costs to the customer.
Even online shoppers could pay more, and much of that is tied to developments in the Strait of Hormuz.
Dr. Andrew Wright with Wilberforce University said, “The Strait, prior to the Naval blockage, trafficked a little more than 20 percent of the world’s liquified and natural oil.”
Wright, a history professor, said the impact will show up in the cost of some products and in shipping and delivery costs.
“If that is being disrupted, that is fuel for the planes and ships that bring goods to the United States,” Wright said.
Fuel costs for shipping are already climbing. Diane Swonk, the Chief Economist at KPMG, a global network of professional firms, expects stores to raise the purchase minimums required to qualify for free shipping.
According to data from Ship Matrix, in April, fuel surcharges as a portion of shipping fees have climbed 17% in three weeks.
The U.S. Postal Service is requesting a temporary 8% charge on priority mail and other products to offset the impact of rising transportation and fuel costs.
USPS said the “time-limited price change” would better align its costs of transportation with the market.
The 8% surcharge would affect base postage prices on Priority Mail Express, Priority Mail, USPS Ground Advantage, and Parcel Select. The price increase will remain in place until January 17, 2027.
Economic professors and industry analysts have been telling News Center 7 that even if the Strait of Hormuz were to open today, it would take months for gas prices to return to normal.
To save money, economists suggest planning your trips. Do most of your driving in a compact car and use gas rewards programs.
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