Senior Living Operators Mitigate Rising Fuel Costs Through Group Purchasing, More Expense Management

Senior living operators are coping with higher fuel prices in 2026 by taking a scalpel to expenses and joining forces as they prepare for a higher-cost business environment.

Spurred by the Trump administration’s war in Iran, the price of a gallon of diesel fuel has risen to around $6.28 per gallon compared to $3.68 last year, according to AAA. Regular fuel costs $4.37 per gallon, compared to $3.11 per gallon last year.

Some operators, such as the Houston-based Aspenwood Company, are already feeling the squeeze of fuel prices on food and transportation costs.

“The Aspenwood Company has 19 communities, and every one of them runs its own vehicles and buses, so we feel fuel prices directly at the pump,” President Heather Tussing told Senior Housing News. “We’re also seeing it through our vendors.”

The Trump administration is seeking to offset rising costs by allowing the use of red-dyed diesel for truckers. The fuel type is typically only used in farming and construction and is exempt from highway transportation fuel taxes.

Fuel cost impacts

The rising fuel costs are seen in several areas directly impacting senior living. Shipping produce from California costs have increased between 40% and 120%, according to U.S. News.

Leaders with Naperville, Illinois-based Charter Senior Living said the operator hasn’t run into significantly higher operational expenses as a direct result of the cost of fuel, but the company is preparing for that possibility and exploring contract negotiations with vendors and other ways to stem the tide.

Charter is leaning on lessons learned from the COVID pandemic to manage its long-term expenses, according to Katie Rodriguez, vice president of dining, facilities and procurement.

“We’re in it for the long game,” Rodriguez told SHN. “We’re not looking at diesel that went up a buck last week. We’re looking at what we planned for two years ago.”

Charter is using previous experiences to predict potential expense increases. Several years ago, the cost of petroleum led to the operator’s leaders to reduce the number of disposable goods used in communities.

The Charter procurement team’s relationships with vendors allows for some flexibility in mitigating cost increases.

“We’re concerned,” Rodriguez said. “Some companies are levying small adjustments for us, but we’re keeping track of those, and we haven’t seen an enormous impact.”

Charter’s leaders are budgeting for the company’s70 communities and negotiating with contract vendors to keep costs low. The company plans to implement rate increases in certain communities to offset rising costs, according to CEO Keven Bennema.

“I look at ways to create opportunities to reduce waste and eliminate unnecessary things that our residents will never ever notice,” Rodriguez said. “I don’t think we’ve seen the end of it, but we certainly have been through this before as an industry and survived.”

Expense management strategies

Charter seeks to source supplies, food and other goods locally. The company uses analytics to determine where it can better manage expenses. Overall, Bennema takes a “less optimistic and conservative view” of senior living expenses, and expects costs to continue to rise into the foreseeable future.

Aspenwood ferries residents to appointments and outings with dedicated vehicles, and fuel costs can add up. The cost of food and supplies like disposable containers also is rising.

The operator is part of a purchasing organization with other operators to help keep pricing stable through collective negotiating.

Aspenwood isn’t the only company using a GPO. Across the senior living industry, operators such as Aegis and LCS utilize them to lower expenses. The LCS GPO helped save between 10% and 12% for Vi Living communities when the two companies merged. Aegis partnered with Team Four Foodservice to find ways to lower dining costs.

“I think smaller operators will feel it the most because they don’t have the same buying power. That’s a big reason group purchasing matters so much right now,” Tussing said. “Over time, I’d expect some of these costs to show up in rates across the industry, so it’s going to be important for operators to show families the value they’re getting.”

The increasing levels of expenses brought on by rising fuel prices are going to put a squeeze on margins this year at a time when they are returning to pre-pandemic norms. Occupancy and rates have been on the rise, but with rising expense trends growing as well, operators are going to have to get granular on expense analysis.

Operators are using a number of margin-boosting strategies in 2026, including staffing efficiency and healthspan efforts.

Despite the efforts and efficiencies being presented by operators, there are still worries if diesel fuel costs continue to increase as global events continue.

Looking ahead, Bennema is worried about the impact of rising on senior living margins.

“If these wars don’t end — and I’m not saying they won’t — but that puts a lot of pressure on a lot of this stuff,” Bennema said.

Andrew Christman is a reporter for Senior Housing News as part of WTWH Media, an avid reader and writer. He enjoys new book finds from his local library, and playing tabletop games with friends.