Rising Fuel Costs Hit Small Business Owners, Sinking Optimism to 95.3

For the better part of a year, the American small business sector has been running a quiet stress test on the price of a gallon of fuel. The results, laid out in a series of National Federation of Independent Business surveys and monthly index readings through 2026, are unambiguous: energy has become one of the most corrosive input costs on Main Street, eating margins before it ever shows up on a customer's receipt, and dragging owners' confidence to multi-month lows in the process.452622

What the Energy Survey Found

The clearest picture of the damage comes from NFIB's Small Business Energy Survey, a nationwide poll of small business owners released in February 2026. About 80% of owners reported that energy costs — across electricity, fuel, and other major sources — significantly impact their operations, whether "very" or "moderately."4544 The survey also found that owners have very few levers to pull when those costs rise: the most common responses were absorbing the hit through lower profits (58%) and passing costs to customers through higher prices (52%).45

NFIB Research Center Executive Director Holly Wade summarized the structural problem plainly: small businesses are highly exposed to energy price increases, have limited flexibility to reduce costs, and absorb direct operational and financial impacts as a result — which in turn limits their ability to hire, retain workers, and grow.4544 Her framing matters because it identifies why fuel is uniquely painful for small firms. A large corporation can hedge fuel costs, renegotiate freight contracts, or spread an increase across thousands of stores. A five-truck landscaping company or a single-location bakery cannot.

The survey also mapped where the money goes. Heating and cooling are the most common primary energy cost, followed by operating equipment and processes, with vehicles ranking third.50 Two-thirds of owners said fuel efficiency is at least somewhat important when replacing vehicles, though adoption of electric and hybrid vehicles remains very limited — an indication that the most obvious long-term fix is out of reach for most small balance sheets.50

Optimism Fell, Then Fell Again

The sentiment data tracked the cost data almost step for step. In March 2026, NFIB's Small Business Optimism Index dropped three points to 95.8, falling below its long-term average of 98 for the first time in nearly a year. Ten components make up the index, and all but two deteriorated that month, with a big drop in earnings trends leading the way; the two that didn't fall merely held flat.2628

Wade called the three-point drop significant precisely because of the broad deterioration beneath the surface, and tied the souring sentiment directly to rising energy prices.2627 Owners were raising prices even as fewer planned further increases in the months ahead — but she warned those plans could change if high input costs persisted. Firms were also scaling back planned wage increases under the cost pressure.26

The slide continued into May, when the index fell another 0.6 points to 95.3, the weakest reading since October 2024 and a third straight month below the historical average.2243 The NFIB Uncertainty Index climbed three points to 91, more than 23 points above its long-run norm of 68.22 NFIB Chief Economist Bill Dunkelberg pinpointed fuel as the central pressure point, saying more owners were struggling with significant and unpredictable fuel price hikes that are harder for small businesses to pass on to customers than for their larger corporate competitors.22

The real-economy signs were equally striking. Job openings among small firms fell to 29% in May, the lowest level since May 2020, at the depth of the pandemic disruption.4347 And in a detail that deserves more attention than it has gotten, the share of owners planning capital investment in the coming months slipped to 16% — matching a level not recorded since March 2009, in the depths of the financial crisis.25

The Lending Angle: A Second Squeeze

That 2009 comparison is where the small business lending story becomes unavoidable, even if the survey data on financing is thinner than the data on fuel. NFIB's own June commentary acknowledged that despite improvements in the overall environment, high interest rates continue to weigh on owners.23 Inflation worries were simultaneously climbing: 21% of owners named inflation their single most important business problem in June, up three points from May and the highest share since October 2024.24

The mechanics of the double squeeze are straightforward. Fuel costs hit first at the profit line — Wade noted that "the first hit is on profits," with owners forced to balance narrowing margins against passing costs to consumers.30 Shrinking profits weaken the cash flow and collateral base a lender evaluates. Meanwhile, elevated borrowing costs make any bridge financing — a line of credit to smooth over a fuel-price spike, a loan to buy that more fuel-efficient truck — more expensive precisely when owners most need it. The 2009-level capital spending number suggests many owners are simply choosing not to borrow and not to invest, which is rational for an individual firm but corrosive in aggregate.25

A Partial Reprieve in June

The June 2026 data offered a genuine, if qualified, turnaround. The Optimism Index rose 2.1 points to 97.4, just shy of its 52-year average and better than the 95.7 economists surveyed by The Wall Street Journal had expected, driven largely by improved expectations for business conditions and real sales.2324 The Uncertainty Index fell two points to 89, and job openings ticked up three points from May's pandemic-era low.23

Dunkelberg explicitly credited lower fuel costs, welcomed by businesses and consumers alike, as part of the improvement.2321 Reporting on the June rebound linked the cheaper fuel to a short-lived geopolitical ceasefire — a reminder of how little control Main Street has over the variable doing so much damage.24

But the same June release carried the warning signs: the 21% inflation-as-top-problem share, a fourth consecutive monthly increase in the share of owners who had already raised average selling prices (up two points to 38%, the highest since January 2023), and an uncertainty gauge still towering over its historical norm.24 June's rebound, in other words, looks less like a resolution and more like a pause dependent on fuel prices staying down.

The Policy Fight Over Relief

The political response has so far been aimed directly at the pump. In an April 2026 op-ed in the Washington Examiner, NFIB's Louis Bertolotti urged Congress to suspend the federal fuel tax, citing the energy survey's findings — more than 80% of small businesses calling energy a significant cost factor, 42% reporting costs had grown substantially over three years, and a majority being forced to raise consumer prices to manage the new inputs.46 By mid-May, NFIB was celebrating President Trump's announcement of support for suspending the federal gas tax, with Bertolotti arguing that a pause in collections would deliver relief to both Main Street and consumers, and noting that small businesses cannot absorb rapid price changes as easily as their larger competitors.48

Wisconsin state director Luke Bacher pressed the case at the state level, arguing that high utility bills and regulatory burdens are hurting owners' ability to operate and grow and that the state should focus on relieving those burdens rather than new investments in energy alternatives.41

This is not the sector's first fuel-cost crisis — NFIB's 2022 inflation survey found 99% of owners reporting that rising gas and fuel prices were having some degree of negative impact, with 77% calling fuel a substantial contributor to inflation's toll.42 What has changed is the accumulation: years of elevated costs layered on top of high interest rates and a labor market that remains hard to staff.

The Read Across the Coverage

The reporting here is unusually consistent. NFIB's own releases, state-level coverage, and independent outlets like Quartz and regional television networks all converge on the same causal chain: fuel prices up, profits down first, prices to consumers up second, hiring and investment plans cut third, optimism down.453022 Where the narratives diverge is on trajectory. The March and May coverage reads as a deterioration story; the June and July coverage reads as a recovery story, with Colorado's index also rising 2.1 points to 97.4 on the same national print.262221

The more persuasive reading is the gloomier one. June's optimism gain was fueled partly by a fuel-price dip tied to a temporary geopolitical ceasefire — an external variable, not a structural fix — and it arrived alongside the highest inflation-as-top-problem share in over a year and borrowing costs that NFIB itself still flags as a drag.2423 The one percent of owners surveyed in 2022 who felt some fuel-price impact has become, by 2026, roughly four in five feeling it significantly.4245 Until fuel costs are durably lower or small firms get real pricing and financing flexibility, the June rebound is best understood as Main Street catching its breath — not the end of the squeeze.