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EAST GREENBUSH, N.Y. -- The record high price of diesel in the Albany, N.Y., region -- $4.27 a gallon -- isn't affecting just consumers and truck owners, because everything is delivered by vehicles using diesel, the Albany Times Union reported.
Some area businesses, like convenience retailer Stewart's Shops, are proceeding cautiously -- the company has raised the prices of its sundaes, coffee and chili by 5 to 10 cents. At Stewart's, the company's fleet of delivery trucks travels 55,000 miles per week, consuming 11,000 gallons of diesel. The company has about 325 stores.
"It's tricky. You don't want to raise it too far too fast, especially if you think there's any chance [fuel prices] are going to come back down," Stewart's president Gary Dake told the newspaper. "I think people don't notice a single transaction. But at the end of the week, they just notice they have less money in their wallet. Inflation is starting to get serious."
The higher cost of diesel could easily result in "cost-push inflation," Anthony Riccardi, a local economist, told the paper. "There's a trickle-down effect of higher fuel costs onto groceries, onto produce," he said. "You're seeing that right now."
With rising prices, consumers might find themselves taking part in another economic principle -- the substitution effect, the report stated. "You start making choices," Riccardi said. "Instead of buying steak, you say 'chicken doesn't look so bad."