Diesel is up more than 75% since the Iran war as US inflation is forecast to reach 3.7%
Economists surveyed by Dow Jones expect the September CPI to show 3.7% annual inflation, up from 3.4%, NBC News reported. Operators budgeting freight costs face a fuel that has outrun gasoline, and the clearest pass-through evidence so far comes from airlines.
The Board Room · Leadership desk
Jet fuel prices have risen 90% since this time last year, per Morgan Stanley economists. Jet fuel typically accounts for roughly 20% to 30% of airline operating costs. Airfare CPI is up 23% year over year.
| Figure | Value | Note | Claim |
|---|---|---|---|
| Jet fuel price rise in a year, per Morgan Stanley | 90% | 8 | |
| Jet fuel share of airline costs, roughly, at least | 20% | up to roughly 30% of operating costs | 8 |
| Airfare CPI, yearly rise | 23% | 9 |
What happened
- Oil has risen to more than $105 a barrel from about $80 since August, according to NBC News.
- Forecasters expect prices to have risen 0.6% from August to September, which would be one of the largest monthly jumps in years if confirmed.
- The Trump administration pressed G7 allies to release diesel stocks, allowed wider tax-free diesel use and struck a supply deal with Putin, and none has made much of a dent.
Why it matters
- decision A diesel assumption for this quarter has little policy relief to lean on. Budgeting for a price drop would mean betting on the newest measure, the Russian deal, which needed eased sanctions and has drawn global backlash.
- contradiction The report's lead credits diesel, yet the September items it itemizes are airfare, tied to jet fuel, and iPhone repricing of 10% to 14%, which Morgan Stanley sees as a small upside to inflation.
- exposure Farm-heavy supply chains carry the sharpest exposure. Agricultural states such as Kansas, Iowa and Texas have taken an especially hard hit from the climb in diesel prices this summer and fall.
The forecast headline rate sits 1.2 points above the forecast core rate [21], and that gap holds more than diesel. Core strips out food and energy [5], so the distance between 3.7% [19] and 2.5% [5] covers food, gasoline and every other energy cost along with diesel. Regular gas is up more than 45% since late February [4] and diesel more than 75% [1]. NBC News opened its report with "Inflation in America is being powered by diesel." [20] The forecast it cites is a single headline number, so a budget line tied to that rate would be pricing more than diesel.
The report's clearest evidence on pass-through comes from airlines. Morgan Stanley economists said jet fuel is up 90% from a year ago and typically accounts for roughly 20% to 30% of airline operating costs [8]. On those shares, a 90% rise adds 18% to 27% to total costs [17]. Airfare CPI is up 23% [9], inside that range. "Airlines may already be approaching full pass-through of the increase in fuel costs to consumers," the economists said [7].
The same method works for diesel. For every 10% of its costs that a fleet spends on fuel, a 75% price rise adds at least 7.5% to total costs [18]. The periods differ, a year for jet fuel and since late winter for diesel [8][1]. The report does not include trucking fuel shares or freight rates, so the fuel share has to come from an operator's own books.
Whether customers accept a surcharge depends on their own budgets. Wage growth was 3% as of September and has not outpaced inflation since March [6]. Against the 3.7% forecast the shortfall is 0.7 points [16]. Spending has held anyway, with the CEOs of the largest banks reporting a steady pace [15]. "Our data shows that our consumer and business customers are doing well," said Wells Fargo CEO Charlie Scharf [13]. We do not know yet how long spending holds with wages trailing prices, and in our view pass-through depends on it.
What to watch
- The BLS September CPI release at 8:30 a.m. Wednesday: whether the annual rate lands at 3.7% and the monthly gain at 0.6%.
- Whether diesel prices fall after the Russian supply deal, given that NBC News reports none of the administration's measures has made much of a dent so far.
- Whether wage growth, now 3%, overtakes inflation for the first time since March.
Clarity's read
What the record supports and how the coverage leans. The claims behind it follow.
Reality
- Evidence58
- Adoption
- Insufficient
- Hype gap+25
- Incentives
- Insufficient
- Confidence60
Claim ledger
Ranked by verification strength, evidence, and original report placement.
- [1]
The price of diesel is up more than 75% since the start of the Iran war in late winter.
- [2]
Prices are expected to have risen 0.6% from August to September, a monthly jump that would be one of the largest in years if confirmed.
- [3]
Since August, oil prices have risen to more than $105 per barrel from about $80.
- [4]
The price of regular gas remains elevated by more than 45% since late February, when the Iran war was launched.
- [5]
Core inflation, which strips out food and energy prices, is expected to rise to 2.5%, its highest level since June.
- [6]
As of September, wage growth was 3% and has not grown faster than inflation since March.
- [7]
Morgan Stanley economists said: "Airlines may already be approaching full pass-through of the increase in fuel costs to consumers."
- [8]
Morgan Stanley economists noted that jet fuel prices have risen 90% since this time last year and typically account for roughly 20-30% of airline operating costs.
- [9]
Airfare CPI is up 23% year over year.
- [10]
Apple's latest iPhone began selling Sept. 12 with price increases generally in the 10%-14% range across models, which Morgan Stanley economists said could have a small upside impact on overall inflation; the report also names airfare as the core category most directly affected by higher oil prices.
- [11]
The Trump administration pressured G7 allies to release more diesel stocks, issued an order allowing more widespread use of tax-free diesel, and announced a deal with Putin for Russia to release some diesel supplies and drop some export restrictions; so far none has made much of a dent in prices.
- [12]
The Russian diesel deal drew global backlash after Trump also eased some sanctions on Russia to facilitate it.
- [13]
"Our data shows that our consumer and business customers are doing well," said Wells Fargo CEO Charlie Scharf.
- [14]
Higher diesel prices this summer and fall have hit agricultural states like Kansas, Iowa and Texas especially hard.
- [15]
The CEOs of the nation's largest banks reported on Tuesday that consumers remain spending at a steady pace.
- [16]
Wage growth of 3% trails the 3.7% inflation forecast by 0.7 percentage points.
- [17]
A 90% rise in an input that is 20% to 30% of costs adds roughly 18% to 27% to total costs.
- [18]
For every 10% of costs spent on fuel, a diesel price rise of at least 75% adds at least 7.5% to total costs.
- [19]
Economists surveyed by Dow Jones expect the Bureau of Labor Statistics' September CPI report, due at 8:30 a.m. Wednesday, to show annual inflation rising to 3.7% from 3.4%.
- [20]
NBC News wrote: "Inflation in America is being powered by diesel."
- [21]
The forecast headline rate (3.7%) is 1.2 percentage points above the forecast core rate (2.5%).
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Sources
2 independent publishers whose own reporting we read for this story.
- abcnews.comMore expensive gas, semiconductors likely pushed up inflation last month
1 article · October 13, 2026
- nbcnews.comWhat’s fueling inflation? Fuel.
1 article · October 13, 2026
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