US gasoline prices could cross the $4-a-gallon mark on Labor Day, setting a record for the holiday as the ongoing conflict in the Middle East keeps crude oil and fuel costs elevated.
The national average gasoline price is likely to reach $4.03 per gallon on Labor Day, surpassing the previous Labor Day record of $3.83 set in 2012, GasBuddy analyst Patrick De Haan said.
Reuters reported that GasBuddy data showed the national average at around $4.13 a gallon on Thursday, nearly $1 higher than the year-ago level. De Haan said gasoline prices are now at their highest level ever recorded this late in the calendar year.
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The $4 threshold is particularly significant for US consumers, as gasoline is one of the most visible indicators of household expenses and can quickly influence perceptions of the wider economy.
Gasoline prices have risen alongside crude oil, which climbed back above $90 a barrel this week after renewed military action involving the US and Iran heightened concerns about disruptions to global oil supplies.
Refining margins have also been supported by concerns over potential disruptions to shipments through the Strait of Hormuz, while attacks on Russian refineries have added pressure to fuel inventories.
US gasoline inventories fell by 1.2 million barrels last week to 205.7 million barrels, according to the Energy Information Administration. That is below the five-year August average of 217.6 million barrels.
US refinery utilisation is already around 98%, its highest level since 2018, leaving limited room to quickly increase fuel output.
The pressure is not limited to gasoline. US diesel prices hit a fresh record this week, while airfares for Labor Day travel are expected to be about 20% higher than a year earlier, according to AAA.
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Tom Kloza, chief energy adviser at Gulf Oil, said there is a better-than-even chance that retail diesel prices could surpass the previous record of around $5.82 a gallon, set in June 2022.
Persistently high fuel prices could add to the economic and political pressure on President Donald Trump, who has repeatedly pledged to bring down energy costs. Trump has also criticised refiners and fuel retailers over elevated pump prices.
For Americans heading out for the final summer holiday weekend, however, cheaper fuel may remain out of reach, with gasoline potentially crossing the $4-a-gallon mark nationwide for the first time on Labor Day.
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