The news: Just a few months ago, several retailers said they would use tariff refunds to cut or keep prices low. But soaring diesel costs threaten to undermine those plans. The national average price of diesel reached $6.3187 per gallon on October 19, up 74% YoY.

The details: Walmart executives reportedly expect rising diesel costs to offset plans to use its $2.9 billion tariff refund to fund price cuts, according to Business Insider, citing a Deutsche Bank note. The note suggests higher diesel prices are beginning to filter through to consumer prices.

Other companies, including Albertsons, McCormick, and Conagra, have also flagged rising costs. McCormick expects 7% inflation in its financial forecasts, partly due to energy challenges, while Conagra anticipates higher prices as fuel and transportation costs rise.

Implications for retail: Diesel powers everything from farm equipment to delivery trucks, so higher prices can drive up costs at every stage of the supply chain, from harvesting crops to getting goods onto store shelves. If those costs persist, they could eat into the savings retailers hoped to pass on through tariff refunds, making it harder to keep prices low and potentially forcing them to raise prices instead. That would put additional pressure on consumers’ budgets and could weigh on spending.

This content is part of EMARKETER’s subscription Briefings, where we pair daily updates with data and analysis from forecasts and research reports. Our Briefings prepare you to start your day informed, to provide critical insights in an important meeting, and to understand the context of what’s happening in your industry. Non-clients can click here to get a demo of our full platform and coverage.