The inflation pressure running through petroleum extraction, refining, and diesel deserves closer attention than a single monthly headline. A January–September comparison of unadjusted producer-price indexes reveals a sharp divide between petroleum, utilities, agricultural inputs and technology—and helps identify where pressure could reach corporate margins and household purchasing power.
In this analysis
- Reading the NSA analysis
- The separate September headline
- Energy: extraction, refining and distribution
- Iran, oil supply and the $85–90 scenario
- Fertilizer and food inflation
- Technology prices and commercial returns
- From producer prices to purchasing power
- What to watch in markets
Start with the nine-month NSA comparison
The central dataset in this analysis compares the average of January–September 2026 producer-price index levels with the average for January–September 2025. The figures below reproduce the contributor’s calculations from BLS not seasonally adjusted data; the detailed sector calculations have not been independently reproduced and should be read as contributor estimates. The BLS headline figures are separately sourced below.
The calculation is: [(average January–September 2026 index ÷ average January–September 2025 index) − 1] × 100. This compares the same nine calendar months across two years. It is neither September’s year-over-year rate nor the change since December, and it is not an annualized inflation rate. Averaging monthly percentage changes would produce a different measure.
NSA means not seasonally adjusted. These indexes retain recurring seasonal patterns. Seasonally adjusted (SA) data remove estimated seasonal effects to help interpret short-term changes. Both are useful, but they answer different questions. Seasonal adjustment and inflation adjustment are separate operations: neither NSA nor SA alone means a monetary series has been expressed in constant purchasing-power dollars.
Another distinction matters: the PPI measures selling prices received by domestic producers. An industry’s output-price increase is not a direct measurement of its production costs or profits. Industry and product series may overlap, so the percentages must not be added together or treated as weighted contributions to overall inflation.
The September headline: energy leads, but inflation extends beyond energy
The BLS September release reported final-demand PPI up 1.3% month over month, seasonally adjusted, and 6.3% over 12 months, unadjusted. Final-demand energy rose 10.8% in the month and accounted for more than 80% of the 2.6% increase in goods prices. Gasoline rose 20.3%.
However, final demand excluding food, energy and trade services still increased 0.5% in September and 5.0% over 12 months. Energy explains much of the immediate goods shock; it does not explain every source of inflation.
These figures describe the latest monthly impulse and September’s 12-month change. The sector tables use a different lens: the change in the average NSA index over the first nine months of each year.
Energy: the strongest pressure lies in the petroleum chain
| Stage | Industry or product | Change |
|---|---|---|
| Extraction | Crude petroleum extraction | +26.334% |
| Extraction | Extraction of crude petroleum, including lease condensate | +30.571% |
| Extraction | Natural gas extraction | +8.738% |
| Extraction | Natural gas from the wellhead | +2.876% |
| Extraction | Natural gas liquids | +7.739% |
| Utilities | Selected electric power generation series | −0.35% to −4.20% |
| Utilities | Electric bulk power transmission and control | −4.20% |
| Utilities | Natural gas distribution | −6.18% |
| Manufacturing | Petroleum refineries | +41.782% |
| Manufacturing | Regular gasoline | +33.080% |
| Manufacturing | Diesel fuel | +57.007% |
| Manufacturing | Industrial gas manufacturing | +7.129% |
| Distribution | Gasoline stations | +9.026% |
| Distribution | Fuel dealers | +9.317% |
Crude oil is a root pressure; refining can amplify it
The contrast is substantial: petroleum extraction prices rise sharply, while refinery output and diesel prices rise even faster. The economic concern is the petroleum supply chain as a whole. Fuel used in freight, agriculture, construction and distribution can transmit pressure well beyond the energy sector.
The larger diesel increase also argues against watching crude alone. The EIA identifies crude prices, refining, distribution and retail factors as drivers of diesel prices. Refinery availability, inventories and product-specific demand can keep diesel expensive even when crude stabilizes. These overlapping indexes do not establish an exact refinery profit margin.
Natural gas looks relatively less inflationary in this comparison
The selected natural-gas measures show smaller increases than petroleum, while the distribution index falls. On this evidence, natural gas is a relative source of price relief within the fossil-fuel complex. That is a statement about these U.S. indexes and this comparison period, rather than a universal claim about gas affordability across regions or uses.
Industrial gas manufacturing is a separate category; it should not be read as another measure of household natural-gas supply.
Utilities show restraint in selling prices
The selected electricity and gas-distribution indexes suggest comparatively subdued pricing. This is encouraging, but it does not establish that utilities reduced their own production costs. Tariff schedules, fuel adjustments, contracts, regulation and regional generation mixes can affect when costs appear in selling prices.
Distribution indexes require a different interpretation
For wholesale and retail trade, BLS generally measures changes in margins: selling prices less the current acquisition prices of goods. The gasoline-station figure therefore should not be interpreted as a 9.026% rise in pump prices or in station operating costs. A margin index also does not directly measure net profit.
Iran, supply disruption and the $85–90 crude scenario
The Iran conflict and the security of Gulf production and shipping matter because disruption can affect both the availability of crude and the ability to deliver refined fuels. Reuters reported on October 14 that the IEA warned diesel shortages could persist into 2027, reinforcing the need to monitor refining and product supply alongside crude.
Financial losses can give producing countries an incentive to seek stronger revenues. That incentive does not demonstrate coordination with major oil companies, nor does it guarantee an achievable market price. Export volumes, spare capacity, inventories, competing supply and demand all affect the outcome.
A sustained $85–90 range for WTI crude, the benchmark underlying CL futures, is a scenario in this analysis—not a verified producer target or a forecast established by the PPI data. Persistent disruption or supply restraint could support such a scenario. Restored flows, refinery recovery or weaker demand could undermine it. WTI and Brent also need to be distinguished when discussing any price range.
Lasting relief would require improvement in the petroleum system: reliable crude supply, functioning shipping routes, adequate refining capacity and replenished product inventories. Lower crude would help, but it may not immediately reverse diesel inflation.
Fertilizer: a second route into food-price pressure
| Industry | Change |
|---|---|
| Fertilizer manufacturing | +15.397% |
| Nitrogenous fertilizer manufacturing | +31.152% |
| Pesticide and other agricultural chemical manufacturing | −5.501% |
Higher fertilizer selling prices can raise farmers’ input bills as contracts and purchases reset. Combined with expensive diesel, this creates a plausible channel from producer inflation to agricultural costs and, eventually, food prices.
Pass-through is neither immediate nor one-for-one. Crop yields, weather, commodity prices, contracts, transport costs and competition influence who absorbs the increase. The decline in agricultural chemicals is a counterweight, although these percentages cannot be netted without expenditure weights.
Imported food can face similar global pressures, but U.S. PPI measures domestic producers. It does not directly establish the input costs of foreign farms or the prices of imported food.
Technology: rising component prices put commercial returns under scrutiny
| Industry | Change |
|---|---|
| Computer and peripheral equipment manufacturing | +14.147% |
| Computer storage device manufacturing | +48.473% |
| Semiconductor and other electronic component manufacturing | +30.473% |
| Printed circuit assembly manufacturing | +127.511% |
The reported technology figures point to a separate potential pressure point. The exceptional printed-circuit-assembly increase warrants particular caution: the exact series, monthly observations and comparable index basis are needed before treating its magnitude as independently established. Readers should not generalize it to every circuit board, chip or finished device.
If sustained, higher component selling prices can increase the cost of building computing infrastructure and technology products. Buyers may absorb the increase, pass it on, redesign products, switch suppliers or negotiate contracts. A higher component index does not establish an equal increase in finished-product prices or identify AI demand as the cause.
The strategic question is commercial: will the products built with this investment win enough paying customers and deliver enough productivity to justify their cost? Strong infrastructure spending can coexist with uneven returns. The useful evidence will be utilization, recurring revenue, customer retention, margins and cash flow—not investment announcements alone.
From producer prices to household purchasing power
A price-index increase is only one part of the economic transmission. The questions for trading desks and portfolio managers are whether firms can pass higher prices to customers, how much margin they absorb, and whether spending growth still exceeds inflation.
For nominal sales or earnings, ATN uses an explicit purchasing-power calculation: inflation-adjusted value = nominal value × reference-period price index ÷ current-period price index. The same reference period must be used for every observation.
The exact growth calculation is [(1 + nominal growth) ÷ (1 + price-index growth) − 1] × 100, with both growth inputs expressed as decimals. Subtracting inflation from nominal growth is an approximation. For a cumulative period, each month is deflated first and the resulting real amounts are summed before comparing matching periods.
The deflator must fit the question. All-items CPI measures broad consumer purchasing power; product-specific indexes better address particular sales categories. The PPI tables above already measure producer-price changes, so they are not deflated again using CPI.
This separates three questions that can otherwise become confused: changes in dollar spending, changes in purchasing power, and changes after seasonal adjustment. Monthly NSA comparisons retain seasonal and calendar effects; matching-period year-over-year and cumulative comparisons provide additional context.
What this means for futures, equities and the inflation outlook
- Crude and refined fuels: watch WTI and Brent alongside diesel and gasoline prices, refinery operations and inventories. Stable crude with expensive diesel would indicate incomplete relief.
- Treasuries: persistent pass-through could challenge expectations for inflation and policy easing. A simultaneous growth slowdown could create an opposing demand for bonds.
- NQ and technology: component inflation can pressure investment budgets, while stronger productivity and revenue can offset it. Higher inflation expectations may also affect the discount rates applied to future earnings.
- Consumers and corporate margins: monitor whether businesses raise prices, absorb costs or cut activity. That distinction will shape the eventual CPI and earnings impact.
The central message is a divergence within the production system. Petroleum shows severe pressure; selected utilities show restraint; fertilizer and technology introduce additional risks. Energy relief would remove a major source of strain, but the broader inflation problem will also depend on services, pricing behavior and the ability of households and businesses to absorb higher costs.
The next step is to watch whether petroleum inflation fades at its source or continues through freight, agriculture and finished goods. That is the bridge between an energy shock and a more persistent inflation cycle.
Sources and further reading
- BLS: September 2026 PPI release — official monthly and 12-month headline figures.
- BLS: PPI overview and definitions.
- BLS: income, CPI and inflation adjustment.
- BLS: PPI databases — underlying series for independent calculation.
- BLS: detailed PPI reports.
- BLS: wholesale and retail margin-price indexes.
- EIA: factors affecting diesel prices.
- Reuters: IEA warning on diesel shortages.