These are uncertain times for contractors everywhere. Escalating material prices from trade issues and transportation disruptions have already driven prices up, and now gas prices are on the rise, too.
In fact, according to the U.S. Energy Information Administration, diesel still sits at over $6 a gallon on average as of early October 2026, with prices exceeding $8 per gallon in California.
What causes gas prices to surge?
The supply chain for gasoline is more delicate and easily affected than many realize. Here are a few factors that can affect it.
Global conflict
One of the most common reasons for gas prices surges is global conflict. That’s because if one or more countries involved in a conflict are significant oil producers, their ability to produce oil for export may be impacted, or they may restrict or ban exports.
This is what caused gas price increases in 1973 with the Yom Kippur War, 1979 with the Iranian Revolution, and in 2022 following Russia’s invasion of Ukraine (and exacerbated by the COVID-19 pandemic that preceded it).
Most recently, the U.S. conflict with Iran has led to increased gas prices because of the closure of the Strait of Hormuz and recent Houthi attacks on pipelines in Saudi Arabia.
Infrastructure limitations
One of the most significant gas price surges occurred from late 2007 to mid-2008. This was primarily caused by rising demand for gasoline and oil while production from OPEC countries remained low. Economic growth outpaced oil production, leading to an increase in prices at the pump.
However, this quickly changed due to the Great Recession that followed, and gas prices dropped back to a low point.
How it’s impacting construction
Higher gas prices can unfortunately impact your bottom line. Here are the specific areas where you’ll most likely see the sticker shock.
Higher bids
Higher costs mean higher estimates, which means project owners may be more reluctant to accept bids. It could also lead to some companies underestimating or undervaluing their bids, leading to change orders later on in the project.
Unpredictable budget fluctuations
Gas prices fluctuate constantly, so budgeting for fuel costs can be difficult. Certain projects that started a year ago when diesel prices were over two dollars cheaper per gallon could run into budgeting issues. But this is mitigated by leaving wiggle room for price fluctuations in your bids.
Reduced demand
An unfortunate fact of rising prices in construction is that it decreases demand for new construction, leading to more competition between contractors for new work.
As costs soar, would-be project owners may reevaluate their planned construction projects or even postpone them indefinitely.
How you can manage costs
Thankfully, there are a few strategies you can employ to improve your chances of success in a time when prices for gas and diesel are rising.
Use digital equipment management tools
Raken’s equipment management feature makes it easy for you to track expenses for vehicles like bulldozers, excavators, skid steers, and more to monitor fuel consumption.
But it goes beyond that. You can also see where equipment is deployed, stay on top of maintenance, and get trends and analysis for better decision making regarding usage.
Switch to electric or hybrid equipment where possible
While not always feasible, certain equipment that is gas-operated can be switched out for electric alternatives. Items such as jackhammers and even small excavators can be electrified in certain cases, and some manufacturers even sell full-size hybrid bulldozers for better fuel consumption.
Track expenses for clearer budgets
More meticulous budget management can help you cut costs for other expenses like labor with better scheduling software and materials by tracking usage and making sure nothing goes missing.
You can also use time tracking tools like the ones that we offer to prevent time theft and “buddy punching” with AI photo ID, custom clock in and out questions, and geofencing.
Get expenses under control with Raken
Our field management tools help you cut costs by saving you time and tracking where your money is being spent. Schedule a demo so we can start the conversation about what you need to succeed in today’s economic climate.