SAN FRANCISCO (KGO) — Rising fuel costs amid the war in Iran mean that delivering packages will cost you more.
Starting April 17, Amazon will implement new additional fees for its sellers. UPS, FedEx and USPS have also added fuel surcharges to combat higher fuel costs.
High fuel prices mean a big shock for many drivers.
“It’s $137. That’s a big deal,” said Jill of Pleasant Hill. That’s how much it cost her to refuel on Sunday.
The Strait of Hormuz has remained closed since the United States and Israel began their war with Iran. It is an important shipping route for crude oil exports from major oil producers. The closure led to higher oil prices and higher gasoline costs.
LIVE UPDATES: Get the latest war news in Iran here
To combat rising fuel costs, Amazon plans to impose a temporary 3.5% fuel surcharge on third-party sellers.
“Transportation costs are a big factor there,” said Dr. Dima Leschinsky, a finance professor at Menlo College. “Every company that’s involved and has the logistics and has to pay for gas will either have to absorb that cost, or they’ll charge the third party that will provide that service. I’m not surprised that’s going to happen, because at some point, Amazon is going to say we can’t absorb all that cost.”
The e-commerce giant is following in the footsteps of UPS, FedEx and the US Postal Service.
Starting April 26, USPS will impose a temporary price hike of 8% on certain packages, including Priority Mail shipments, due to increased fuel prices.
More: California gas station charges $10 for a gallon of gas
This means customers may have to pay more for deliveries.
“This is crazy,” said Stevie, a driver from San Francisco. “It will slow people down from ordering things. And certainly because you’re already paying other costs on top of that.”
“One way or another, this will ripple through the supply chain and hit our pocketbooks,” said Professor Andy Tsai, a supply chain expert at Santa Clara University’s Levy School of Business. “Rising oil prices are impacting shipping and logistics costs. Amazon, UPA, USPS. I don’t think there’s any escape. Mortgage rates are going up. Everyone has been talking about affordability since before the presidential election and the geopolitical situation isn’t making things any better.”
As gas prices continue to rise, food delivery apps will likely consider charging additional fuel-related fees, economists say.
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