Share and Follow
The national average price for a gallon of regular gasoline remained steady at $4.125 on Monday, as reported by AAA, mirroring Sunday’s average.
WASHINGTON — Despite growing concerns about the future of a pivotal oil trade route due to tensions with Iran, gas prices held firm from Sunday to Monday.
AAA reported that the national average for regular unleaded gasoline remained at $4.125 on Monday. This stability follows a slight decline from Saturday’s average of $4.135 and Friday’s $4.153, indicating a 3-cent drop over the weekend.
Nevertheless, current prices are still considerably higher than those earlier this year and the previous year, with gasoline costing about 92 cents less at this time last year.
The slight decrease in prices coincides with a ceasefire agreement with Iran, which had previously led to the closure of the Strait of Hormuz, a critical corridor for approximately 20 percent of the world’s crude oil. However, traders face uncertainty as the U.S. Central Command has announced a blockade of ships entering or leaving the strategic strait, set to commence at 10 a.m. Eastern on Monday.
Gas prices remained elevated across the country, with every state averaging at least $3.443 per gallon. The highest prices continue to be on the West Coast, led by California at $5.900, followed by Hawaii at $5.649 and Washington at $5.391.
Meanwhile, the lowest prices are in the central U.S., including Oklahoma at $3.443, Kansas at $3.490 and North Dakota at $3.608.
Diesel prices dropped by about 1 cent Monday compared with Sunday. The average cost of a gallon of diesel on Monday was $5.652, compared to $5.663 on Sunday and $5.683 on Friday, marking another 3-cent drop over the weekend. Despite the decrease, diesel costs remain near record highs, continuing to put pressure on transportation and supply chains.
Why might prices differ from one gas station to the next?
Although the national average passed $4 a gallon, the price that drivers pay varies widely by state, city and station.
Taxes alone can create large gaps. California’s gas taxes and fees totaled about 71 cents per gallon last year, compared with roughly 9 cents in Alaska.
Distance from refineries, the type of retailer, the volume the location goes through, and whether there are other fuel options nearby also play a role.
Gas stations near competitors may choose to price gasoline competitively on large outdoor signs to attract drivers, hoping they’ll come inside and buy higher-margin items, said Neal Walters, a partner focused on energy at the global management consulting firm Kearney.
“It’s one of the only retail locations where you don’t have to go into the store to find out what you’re paying,” Walters said.
Why are gas and diesel prices elevated?
Prices began to rise sharply after the U.S. and Israeli attack on Iran on Feb. 28, which led to escalating tensions and military conflicts across the Middle East, where a large majority of global oil is sourced and distributed.
While not the sole factor for rising costs, volatile trade routes and other uncertainties in production have led to higher prices of crude oil, which is refined to make diesel, gasoline and jet fuel.
Crude oil has surpassed $100 per barrel several times in recent weeks, driving higher fuel costs. Rising diesel and jet fuel prices are also expected to increase transportation and air travel costs, potentially pushing up prices for goods across supply chains.
Highest average gas prices ever?
The record for the highest average price of a regular gallon of gas was set on June 14, 2022, with a national average of just over $5 during the early months of Russia’s invasion of Ukraine. The highest recorded average gallon of diesel, $5.816, came just five days later on June 19, 2022.
The Associated Press contributed to this report.