Name: Why you’re paying more at the grocery store
Uploaded: 2026-04-02T04:53:53.271Z
Duration: 4 min 31 s
Description: The Iran war has caused oil, natural gas, and fertilizer prices to soar, impacting farmers and potentially leading to higher food prices. Gustavo Flores-Macías, dean of the School of Public Policy at the University of Maryland, gives insight.

The Iran war has caused oil, natural gas, and fertilizer prices to soar, impacting farmers and potentially leading to higher food prices. Gustavo Flores-Macías, dean of the School of Public Policy at the University of Maryland, gives insight.

California

Grocery prices in the United States are expected to increase, particularly for meat, dairy, and packaged goods, as a result of the ongoing conflict with Iran. Rising oil and fuel prices, including a 44% increase in diesel, are contributing to higher costs throughout the supply chain, affecting both agricultural production and transportation.

Experts note that these increases may become more pronounced in the coming weeks, especially if the conflict persists and the Strait of Hormuz remains closed. While the U.S. government is considering measures such as releasing oil reserves and reducing gas taxes, affordability remains a significant concern for consumers nationwide.

Why you’re paying more at the grocery store

War with Iran continues to hit home. Economists warn that grocery prices, especially for meat, dairy, and packaged goods, could soon rise. For insight, we welcome Gustavo Flores Macias, Dean of the School of Public Policy at the University of Maryland. Gustavo, thank you for joining us this morning. Good morning, Andrew. Thank you for having me. All right, so Gustavo, we've been hearing since this war started that, you know, with oil prices jumping right now, that fuel prices are gonna be increased. And there's a stat that shows for every 10% fuel increase, food prices jump about 3%, with diesel up 44% as we're heading into the summer, where basic groceries, do you think they'll become a luxury as we head into the summer, the longer this goes on? I think that's right. We're going into the summer season when travel and, you know, road trips and people tend to just spend more time in the car. The numbers that you provided, I think, are good estimates. You know, there are lots of different ways in which increases in the price of oil first, and then the price of gas, they multiply throughout the economy and they affect most goods and services that we consume. And this certainly has to do with, you know, the grocery store, what we're buying in terms of, you know, agricultural products, produce, and so on, meat, but also the cost of travel itself becomes more expensive. So airfare, you know, parts that require energy, hydrocarbon-based products, all of these things are going up. And, you know, affordability has been just a major concern over so many months now, and it continues to be the case with the current situation in Iran. So the domino effect is really hitting Americans across the country. The war is also making it more expensive to grow because of skyrocketing fertilizer costs. We've been discussing that lately. How much of this price hike is actually reaching the farmer and how much is just being eaten up by the fuel tank? Yeah, there is typically a lag between when the disruption takes place and when we see the increase in prices. So right now we're already seeing at the pump on average, the price of gas nationwide is now over $4 per gallon and certainly higher in California and other parts of the country, but there are still, you know, there are still some reserves. There are still ways in which the different parts of the supply chain are absorbing the costs. And we're likely to see more of these increases in the coming weeks, especially if the conflict continues. All right, so, you know, these prices are being absorbed right now, but when do you think the breaking point could hit for the American consumer, the average American consumer? We're already seeing, you know, the increase of the pump, you know, over 50 cents just in the last few weeks since the war started. This is likely to continue increasing if the Strait of Hormuz continues to be closed. So it really is now a matter of the next two, three weeks that we will see just this generalized increase. And I think it's likely to be what you suggested, you know, 2% here, 3% there, but inflation had already been a major concern. All right, so I guess the question is, is there anything the U.S. can do domestically to shield our food prices from the Middle Eastern conflict or are our dinner tables now permanently tied to the price of oil in the Persian Gulf? Yeah, there are several measures. One of them, you know, the White House is releasing and tapping into the oil reserves that the United States has. And that's one way to sort of buffer a little bit this external shock. There are other ways that are less sort of market friendly. You know, some countries are experimenting with restricting the number of times that gas stations can increase gas prices. So Germany, for example, say you can only increase prices once a day. So that's where we are. Those types of non-market types of solutions are not typically adopted in the U.S. I think the U.S. typically looks for, you know, taking away some of the taxes on gas to bring the price down. So these are different measures that are on the table. And I think we're at the point where we will really start seeing some of these as a very necessary aspect in the coming weeks to keep affordability. Yeah, there was even, you know, the issue raised here in California about getting rid of a 60 cent sales tax here in California. Gustavo Flores Macias, Dean of the School of Public Policy at the University of Maryland. Thank you so much for joining us and your expert insight this morning. We appreciate it. Thank you, Andre.

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