As the Yukon-Kuskokwim (Y-K) Delta emerges from a long winter that strained fuel stores, the arrival of the first barges of the season might typically be cause for celebration. But this year, it’s cause for anxiety. Suppliers have told customers to expect price increases driven by the war in Iran of at least several dollars per gallon on the millions of gallons of diesel and gasoline that flow into the region annually.
In the hub of Bethel, city manager Lori Strickler said that she is budgeting for a 30% increase in fuel costs for the city over the next year. She’s looking for municipal buildings that can be closed and ways to move employees into shared spaces. It’s a difficult process because she still has no idea how much prices will jump, and suppliers have an incentive to keep this information private.
"We don't know what it's going to look like, but we do know that once that last barge hits, our costs are locked in," Strickler said.
Strickler said that the city will likely receive its first of multiple bulk fuel shipments in June. With the fall freeze-up, Bethel and dozens of communities across the region will be locked into prices and left to deal with the impacts.
"Everything's just going to increase, and to what extent no one that I have talked to knows," Strickler said.
The global oil market and the quotes that fuel suppliers are giving rural Alaska customers are both changing rapidly as the Strait of Hormuz remains effectively shut down. But Western Alaska diesel and gasoline prices that were locked in last year by the key suppliers – Crowley, Vitus, Delta Western, and Top Fuel – have held relatively steady. In Bethel and in nearby villages, that price hovers around $7 or $8 a gallon; in some coastal communities, it tops $9 a gallon.
Upriver from Bethel, fuel rates are expected to increase by at least 50% at the three-school Yupiit School District, according to superintendent Scott Ballard.
"I've been talking to Crowley for, you know, well over a month and a half now, and it's, it's ugly," Ballard said.
Ballard said that Crowley recently quoted him a price roughly $2.50 more per gallon than last year’s bulk fuel order. It would cost the already cash-strapped district an additional $500,000. Ballard said that he’s waiting to pull the trigger on the order, hoping for even a small decrease in price that could save the district thousands of dollars.
"The best thing would have been to anticipate that this war was going to start and order the fuel back in January, February," Ballard said.
At the much larger Lower Kuskokwim School District (LKSD), Superintendent Andrew “Hannibal” Anderson said that the district is budgeting for an 80% increase in fuel costs for its nearly two dozen village schools. Like the Yupiit School District, Anderson said that LKSD still hasn’t confirmed the price it will pay or how it might adjust its budget to account for the massive cost.
Power utilities are also bracing for a hit. Alaska Village Electric Cooperative (AVEC) President Bill Stamm said that the power provider that serves 58 rural communities is anticipating at least a 50% fuel cost increase.
Stamm said that if families can’t afford fuel, it will strain both household budgets and regional utility capacity.
"What does rural Alaska look like in the spring when people haven't been able to afford heating fuel? So they've been running up their electric bill, keeping their house warm, and they get to the springtime and realize, well, now I've got a $10,000 bill for my electric?" Stamm asked.
For the first time, Stamm said that AVEC is eyeing the state’s bulk fuel revolving loan program as a potential cash flow solution. The Alaska Legislature passed a bill on May 20 that would raise the cap on how much loan recipients can borrow to $1.5 million.
The program provides a funding lifeline for power utilities, fuel retailers, and other rural entities to borrow at low interest rates and pay back loans the following spring. In 2025, barge-reliant communities on the Y-K Delta accounted for nearly half of the 51 communities that received loans through the program.
A $3 per gallon increase in the cost of fuel would push available funds in the program well into the red if additional entities apply for loans in 2026, according to a presentation by the Alaska Division of Community and Regional Affairs.
'Every aspect of life in Western Alaska'
Fuel shipped in by barge also has a direct impact on the small air carriers that serve Western Alaska. Ryan Air Director of Stations Justin Polayes said that the carrier recently instituted its first-ever fuel surcharge on passenger flights out of Anchorage to offset a doubling in the price of jet fuel. He said that a similar fuel price jump is likely around the corner for the smaller planes that deliver essential mail and freight to dozens of remote communities.
"We're preparing ourselves for fuel price across Western Alaska, across all our bush locations, to double in price," Polayes said. "There's a real chance we might operate at a loss or break even, depending on what the fuel is gonna look like, and it might be like that for a considerable amount of time."
Polayes said that no one at Ryan Air can ever remember fuel prices being as volatile. "We weren't seeing 20, 30, 40% jumps in a week or two. It was more gradual," he said.
Polayes said that what’s mostly on his mind are the roughly 80 employees he oversees.
"I'm worrying about their being able to heat their homes, fuel their cars, all my village agents in 73 villages fueling up their four-wheeler to meet the plane. This is, it's gonna affect every aspect of life in Western Alaska," Polayes said.
The costs for rural families that are already struggling to shore up their communities against severe environmental impacts, or actively pursuing relocation, could be staggering. Gwen Holdmann, who is the chief scientist at the Alaska Center for Energy and Power at the University of Alaska Fairbanks, said that even a $2 a gallon increase in fuel costs would add an average annual financial burden of $2,400 for every Western Alaska resident.
"The rule of thumb would be about 1,200 gallons on average per person per year. And so you can pretty quickly do the math. So a household of four, you can pretty quickly get to approaching $10,000," Holdmann said.
Added fuel costs for rural families will hamper subsistence activities that are normally in full swing as the first fuel barges arrive in the region. Price increase impacts would ripple through all goods and services.
High oil prices have created a short-term windfall for the state’s finances, and the state is looking at ways it can help. This year’s operating budget includes $15 million for the bulk fuel program, $29 million in energy relief for K-12 schools, $11 million to restore a state heating assistance program, and $200 energy relief checks tacked onto Permanent Fund dividends.
But in Western Alaska, it may be less about the day the governor signs the budget, and more about the day the first barge hits.
