The cost of gasoline in the United States saw a minor uptick on Tuesday, with the average price for a gallon reaching $4.140, up slightly from Monday’s $4.119. This increase comes amid ongoing geopolitical tensions and economic uncertainties.
On the national stage, gas prices are inching upward, largely influenced by the continuing trade tensions in the Strait of Hormuz and the volatile rhetoric from President Donald Trump. According to AAA, the average price of a regular gallon of gas hit $4.140 on Tuesday. This marks a consistent rise in prices since they surpassed the $4 mark last week for the first time since 2022.
The West Coast remains the priciest region for gasoline, with California leading the charge at $5.930 per gallon, closely followed by Hawaii at $5.604 and Washington at $5.392. In contrast, more affordable prices can be found in the Great Plains and parts of the South. Oklahoma offers the lowest average at $3.347 per gallon, with Kansas at $3.390 and both Iowa and North Dakota at $3.484.
Adding to the dramatic landscape of fuel prices, a rural gas station in Northern California caught attention last Friday when it reportedly charged $10 per gallon for regular fuel. The price was so exorbitant that it exceeded the capacity of the station’s display, forcing it to show $9.99 instead, as reported by The Los Angeles Times.
Last Friday, The Los Angeles Times reported that a rural gas station in Northern California was selling regular fuel for $10 per gallon. The price was so high that the vendor was unable to accurately list the price outside the station, listing $9.99 instead.
Diesel prices also continued to rise, reaching $5.646 per gallon Tuesday — just 2 cents below the record high. That’s up from $5.618 on Monday and up from $5.454 last week.
Why are gas and diesel prices rising?
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.
The Strait of Hormuz, through which roughly 20 percent of global oil passes, has effectively been closed off by Iran’s military. The country faces mounting international pressure to reopen, including threats of military action by U.S. President Donald Trump.
The White House issued a statement March 31, essentially urging consumers to be patient.
“When Operation Epic Fury is complete, gas prices will plummet back to the multi-year lows American drivers enjoyed before these short-term disruptions,” White House press secretary Karoline Leavitt said. “President Trump remains committed to fully unleashing American energy dominance, lowering costs, and putting more money back in the pockets of hardworking American families.”
Seasonal demand is also contributing to the increase, as warmer weather and spring break travel typically lead to higher gasoline consumption, according to AAA.
What factors into gas prices?
A lot of it is outside the gas retailer’s control. Roughly half the price at the pump pays for the cost of crude oil, the main ingredient in gasoline, according to the U.S. Energy Information Administration. About 20% goes to refiners who turn crude into gas.
Those costs have risen as crude oil prices jumped in response to the war and shipping disruptions in the Strait of Hormuz. Gas retailers are adjusting the price at the pump to account for the higher price they just paid for their next shipment of gasoline.
Taxes — federal, state and local — account for nearly 20% of the price, while about 10% is left for retailers, who still have to pay for transportation, labor and other expenses.
Retailers’ markup has averaged about 38 cents a gallon over the past five years, according to the convenience store trade group NACS, citing data from research firm OPIS. After expenses, stations may keep roughly 15 cents per gallon, said Jeff Lenard, a vice president at NACS.
“Some make more, some make less,” Lenard said.
Patrick De Haan, head of petroleum analysis at GasBuddy, compared it to a homeowner’s role in setting their sale price.
“If I was selling a house today, I’d be beholden to whatever the housing market is,” De Haan said. “That’s the same for gas station owners. Whatever the price of oil and gasoline are, they are a price taker, not maker.”
Why might prices differ from one gas station to the next?
Although the national average just 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, how much 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.
Highest average gasoline 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.
