Gasoline prices on Long Island spike 18.2% in March, the fastest increase in nearly 4 years

The cost of gasoline on Long Island and in the metropolitan area, powered by the war with Iran, rose 18.2% last month compared with a year ago — the fastest rate of growth since summer 2022. 

March’s surge in gas prices led to higher inflation overall in the region and nationwide, with the consumer price index rising at its fastest pace in more than a year. The index was released on Friday by the federal Bureau of Labor Statistics.

Before the United States and Israel began bombing Iran on Feb. 28, pump prices in the metropolitan  area were falling. They were down 4.3% in February, year over year, down 4.7% in January and down by double digits last summer, according to the statistics bureau.

The subsequent spike in local gasoline prices is the result of fluctuations in the global energy markets as the war disrupts oil production and transportation in the Persian Gulf. Prices have soared with the closure of the Strait of Hormuz, through which about one-fifth of the world's seaborne oil passes.

“Even if the Strait reopens soon, Long Island consumers should expect prices to remain elevated as the market slowly adjusts,” said John A. Rizzo, an economist and Stony Brook University professor. “If the closure persists, inflation will accelerate.”

He and others said Friday that oil prices tend to shoot up faster than they fall.

“This occurs because [gasoline] retailers quickly raise prices to protect their profit margins during a crisis,” said Rizzo, “but are slow to lower them when costs drop, waiting to see if markets stabilize.”

Economists said higher pump prices could cause consumers to reduce their spending, which in turn could hurt economic growth. Consumer spending accounts for roughly 70% of economic activity, they said.

Looking for ways to save

In Valley Stream, people waiting for a Long Island Rail Road train to Manhattan said they had been rethinking their budgets in light of having to spend more to fill up their car.

Mike Young, 42, an attorney from Lynbrook, said he was taking the train to the city to have dinner with friends rather than driving.

“It’s gotten to the point where it’s cheaper to use the LIRR to get to the city when you take into account the cost of gas and a parking garage on the Lower East Side,” he said Thursday night.

Maria Sanchez, 22, a student at LIU Post in Brookville, said she’d canceled an overseas vacation and instead would visit the Adirondacks.

“Gas prices are out of sight,” she said. “I have no idea when they will be dropping, so I’m looking for ways to save money on other things."

Gasoline wasn’t the only commodity whose price rose last month.

The cost of fruits and vegetables climbed 10.9% in March compared with a year earlier. Household furnishings and nonalcoholic beverages were up 6.7% and 5.3%, respectively, according to the statistics bureau.

The increases were partially offset by declines in recreation and used cars and trucks. Recreation was down 3.5% and used cars and trucks were down 3.3%.

The overall consumer price index for the 25-county region that includes Long Island rose 4% last month compared with March 2025. That was the fastest pace since February 2025’s 4.2% increase. The index climbed 3.2% in February, year over year.

Gas prices up more nationwide

The national index rose at a slower rate: 3.3% in March compared with a year earlier.

But gasoline prices nationally rose more than in the metropolitan  area: 18.9%. The difference is partly due to the region receiving its supply via pipeline and barges rather than trucks, Newsday previously reported.

Economist Scott Anderson of BMO Capital Markets in Toronto predicted “another big jump” in gasoline prices this month.

“It’s way too early to relax our guard with the Strait of Hormuz still effectively closed. This won’t be the last unfavorable report we see on inflation," he said.

Scott and other economists pointed to the wide-ranging impact of higher pump prices on the cost of other goods and services nationwide. For example, airfares climbed 14.9% in March compared with a year earlier while electricity was up 4.6% and clothing, 3.4%.

“These categories saw a marked acceleration in price increases as the energy shock got passed along,” Scott said.

Ryan Young, chief economist at the Washington-based think tank Competitive Enterprise Institute, agreed, adding, “high energy prices are here to stay through at least the end of the year … [because] the oil infrastructure already damaged will take months to rebuild.”

By James T. Madore

james.madore@newsday.comJamesTMadore

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.