Local transportation company not worried about rising fuel prices

MESILLA VALLEY, New Mexico— The ongoing war in Iran continues to have wide-ranging impacts for most American consumers. Over the last week, fuel prices have increased substantially.

According to AAA, the average price for a gallon of diesel last month was $3.66. The current national average for a gallon of diesel is $4.89.

One industry analyst told ABC-7 that consumers will ultimately be the ones impacted.

ABC-7 spoke to Royal Jones, the founder and president of Mesilla Valley Transportation. He said he is not worried about the ongoing surge. He also doesn’t believe his business will be affected.

Mesilla Valley Transportation has a fleet of 1,700 trucks and 6,500 trailers. It’s one of the largest transportation companies in the entire Southwest.

"With that many trucks, as you know, we burn a lot of diesel,” he said.

He explained that his company uses nearly two million gallons of fuel every month.

"We do get a fuel surcharge, but it takes a little while to adjust, just like every two weeks. So, well, it's going to be tough these first two weeks that we have to eat that price,” Jones said.

Jones explained that for his company, a month’s worth of fuel typically costs around $6.5 million.

But with this recent increase, he anticipates his company will spend $8.5 million in fuel this month alone.

Jones does not believe business will stop for his company.

"It can slow down, but it's not going to stop. Would you like to go to the grocery store when there's nothing in there? That's what would happen," he said.

Matt McClain, a petroleum analyst with GasBuddy, said he is worried the overall rise in fuel prices will be passed down to consumers.

“I am concerned that we're going to start seeing shipping rates increase, if they haven't already. And that could be a literal direct translation to an increased price at grocery stores, starting off with your fresh produce, never frozen meats and dairy items because they require more frequent shipments due to their shorter shelf life,”McClain said.

Jones believes he will get his money back, and the company won’t suffer a financial loss. He said this is because trucking companies charge a fuel surcharge, which is an extra transportation fee.

"It hurts the average person more than it hurts the trucking companies,” Jones said.

McClain added, “We're going to see a ripple effect in our economy. More than just pulling up to the gas pump and filling up our tanks, we're going to start seeing that reflected in pricing in grocery stores, in retail stores, our clothing, whatever the case may be, even our online shipping."

Still, Jones remains optimistic.

“I don't think this is going to last.”