Get ready for grocery prices to get even more painful

Rising diesel prices are making it more expensive to produce and distribute groceries for US households.

Michael M.

Santiago/Getty Images Attacks on Middle East tankers and oil infrastructure are causing diesel prices to soar.

Higher fuel prices have a significant impact on the cost of transporting food.

Households got some relief from tariffs this year, but the Iran conflict is adding new price pressure.

Grocery bills had begun to stabilize after a bruising stretch of inflation.

Now, rising fuel and transportation costs threaten to make that relief short-lived.

While food prices have managed to hold fairly steady this year, much of September's accelerating headline inflation number was driven by a 20.4% increase in energy prices — the largest hike since May, the US Bureau of Labor Statistics said Wednesday.

Attacks on oil tankers and energy infrastructure in Iran, Saudi Arabia, and Russia have complicated the global supply of diesel, which is likely to raise transportation costs across the economy in the coming weeks and months.

Those increases in fuel and energy significantly impact the cost of producing and distributing food for grocery stores that are thousands of miles from the infamous Strait of Hormuz.

Grocery chain Albertson's said on an earnings call Tuesday that its business is being squeezed by higher gas prices for US shoppers and higher diesel prices in its operations.

And spice maker McCormick said earlier this month that it now anticipates 7% inflation in its financial forecasts, due in part to energy challenges.

"We're facing more costs, both in terms of raw packaging, but also freight, primarily freight costs due to fuel, as well as capacity constraints in the US," CFO Marcos Gabriel said on an earnings call.

Food conglomerate Conagra likewise projected higher prices in its business through the remainder of the year due to accelerating fuel and transportation costs.