WASHINGTON, March 25 (Reuters) - The U.S. Postal Service

said on Wednesday it is seeking approval for a temporary 8%

price hike for priority mail and package deliveries, effective

April 26, to deal with rising transportation fuel costs.

The USPS, which needs approval from the Postal Regulatory

Commission for the temporary price increase, said the surcharge

will provide a "bridge to a permanent mechanism to reflect

market conditions in prices for competitive products" and comes

as USPS has warned it could run out of money as soon as

October.

The hike will not affect the price of first-class stamps.

USPS said FedEx ( FDX ) and UPS have imposed fuel

surcharges of 25% to 28% for ground and air deliveries since the

start of the Iran war as a result of the jump in oil prices,

including sharp rises in jet fuel and diesel.

"Transportation costs have been increasing, and our

competitors have reacted with a number of surcharges," USPS

said. "We have steadfastly avoided surcharges and this charge is

less than one-third of what our competitors charge for fuel

alone."

USPS plans for the surcharge to be in effect through January

17 of next year, by which time the agency will determine whether

a different long-term approach is needed.

U.S. Postmaster General David Steiner told Congress earlier

this month that hiking first-class mail stamp prices to 95 cents

or $1 or more, up from the current 78 cents, would provide added

revenue and help it cut losses.

Stamp prices are up 46% since early 2019, when they were 50

cents, but Steiner said they are still far lower than in other

countries. USPS has reported net losses of $118 billion since

2007 as first-class mail, its most profitable product, has

fallen to its lowest volume since the late 1960s.