Oil price spikes take three months to hit grocery bills
Business
The price of a gallon of milk is tethered to the price of a barrel of crude oil by a invisible, ninety-day fuse.
When global energy markets experience a sudden shock, the impact doesn't hit the supermarket checkout line immediately. Instead, it travels through a complex web of contract indexing, where the prices for shipping and manufacturing are locked in months in advance. In major economies like Germany, it takes roughly one to three months for an oil spike to fully migrate into the Consumer Price Index.