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- October 17, 202610°
- BIST10011,722-2.89%
- USD49.45+0.05%
- EUR55.62+0.37%
- GOLD4,181.10+0.26%
- INTEREST37.00%-1.00
- BITCOIN81,523+0.03%
- October 17, 202610°
Regular gasoline in the US rises above $4 per gallon
The national average price of regular gasoline in the US rose to $4.006 per gallon as of August 10. While annual consumer inflation stood at 3.4% in July, fuel prices increased 24.6% from the same month last year.
The national average retail price of regular gasoline paid by drivers in the US reached $4.006 per gallon on August 10. Fuel prices therefore remained above the politically sensitive $4 threshold.
This marked a reversal from expectations at the beginning of the year. The US Energy Information Administration projected in January that gasoline prices would fall by 6% in 2026. In its latest forecast, however, the agency put the annual average price at $3.78, compared with an average of $3.10 in 2025.
Fuel increase adds to inflationary pressure
Although gasoline prices declined on a monthly basis in July, the annual increase remained at 24.6%. The annual rise in overall energy prices was 14.7%.
Annual consumer inflation in the US was measured at 3.4% in July. In January, before the conflict began, the rate stood at 2.4%.
Changes in fuel costs varied by region. Gasoline prices in the Washington metropolitan area rose 24.8% annually, while the increase in the Dallas–Fort Worth area was 19.8%.
Transportation costs squeeze households
Higher crude oil prices are increasing the costs of road and sea transportation as well as manufacturing. Costs at the fuel pump can also feed into the prices of food and other goods after drivers leave the station.
Pressure on inflation cannot be explained solely by the Iran conflict; tariffs, supply constraints and other economic factors also contributed to price increases.
Costs also rose in air transportation. The airline fare index of the US Bureau of Labor Statistics increased 25.5% in July from the same month last year.
The Gulf Coast spot price for jet fuel averaged $3.40 per gallon in July. The increase, which represented a rise of approximately 68% compared with January, was also driven by insufficient aircraft supply, strong travel demand, capacity constraints and reduced competition.
Energy costs move to the forefront of US politics
Vice President JD Vance said in a television interview that one of the priorities in the conflict was keeping oil and natural gas prices low across the US. Vance identified preventing Iran from acquiring a nuclear weapon as the second objective.
In opinion polls, energy costs emerged as the leading concern related to the conflict. One survey found that 69% of Americans were concerned that the war would increase gasoline and fuel prices. The figure was 79% among Democrats and 59% among Republicans.
Another survey found that 58% disapproved of the US military attacks against Iran, while 37% approved of them. In a survey conducted in late July and early August examining which party was viewed as more trustworthy in addressing the cost of living, Democrats led Republicans by 8 points.
The Strait of Hormuz also affects prices in the US
The Strait of Hormuz is a critical link through which developments in the Middle East affect household budgets in the US. Approximately 20 million barrels of oil passed through the strait each day in 2024. That amount represented more than one-quarter of global seaborne oil trade and approximately one-fifth of worldwide oil consumption.
Continued restrictions on maritime transportation kept the geopolitical risk premium in crude oil prices elevated. Brent crude traded at $88 per barrel, while West Texas Intermediate crude traded at approximately $82.
The fact that the US obtained a relatively small share of its oil directly through the Strait of Hormuz before the war did not limit the impact on global markets. Supply disruptions in the Gulf can affect international benchmark prices and, in turn, refinery and fuel costs in the US.
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