From packaging to shampoo, consumers can expect higher prices beyond the gas pump

Machines heat, melt and form increasingly costly plastic pellets into random items like bait buckets and medical-grade containers at Texas Injection Molding in southeast Houston.

War in the Middle East has strained the global supply of plastic, putting pressure on manufacturers like company founder Jeff Applegate.

“When your material goes up 10% or 15%, it puts a real squeeze on you, really quick,” Applegate said.

Global price increases and supply constraints add uncertainty to his operation, which goes through roughly 8 million pounds of plastic a year. “The longer this goes on, the more disruption there is, we'll have to pass some of those costs on to our customers,” he said.

While Applegate’s customers are manufacturers, consumers are likely to soon feel the effects of higher prices of plastics and other petrochemical products as they trickle through the supply chain.

Economists say inflationary pressure could worsen. Already in March, the consumer price index rose to 3.3% compared to a year earlier — up from 2.4% in February. That jump was driven largely by higher gasoline prices tied to the war, and it’s just the first wave of how conflict with Iran is showing up in inflation data.

“Petrochemicals account for around 15% of global oil demand, and they are used in a wide range of everyday products — think of plastics, fertilizers, detergents,” said Christiane Baumeister, economist at the University of Notre Dame. “So, the increased cost will basically ripple through to the industries that rely on petrochemical inputs.”

By May, Baumeister predicts core inflation — the measure of inflation excluding energy and food prices — to reach 3%. The latest core inflation measure for March was 2.6%.

Pass-through price increases will also ripple through via higher diesel prices, according to The Conference Board senior economist Yelena Shulyatyeva.

“We use diesel to transport goods across the country; it could increase prices of manufacturing,” Shulyatyeva said. “That will have a broader impact on a broader set of goods.”

Price increases are likely to show up at the grocery store, given how ubiquitous plastics and other fossil fuel-dependent consumer products are, according to University of Houston energy economist Ed Hirs.

“The meat displays, everything plastic wrapped, the styrofoam, encasements — all of that comes from petrochemical plants,” he said. “Energy drinks, the coffee drinks — even though it's a can, inside is a plastic lining.”

It’s hard to find anything on the supermarket shelves untouched by oil and gas: diapers, shoe polish, lighter fluid, shampoo bottles, and even many popular lip balms. As the global supply crunch stretches on, consumers can expect to pay higher prices well beyond the pump.