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The price of gasoline and diesel fuel, as well as things like home heating oil, is still elevated due to the on-again, off-again attempts by Iran to close the Strait of Hormuz. That doesn't affect American supplies, but due to the global nature of the petroleum market, it's still keeping prices elevated.
It's a small comfort, but we're still one of the cheapest countries in the world to fill your tank in.
American prices for transportation fuels gasoline and diesel remained at four-year highs on Tuesday as the war with Iran moved into the 53rd day and the Strait of Hormuz remained mostly closed to vessel traffic.
The national average price of a gallon of unleaded regular gasoline stood at $4.02, a 28.1% increase from $3.14 a gallon average at this time last year. National gasoline prices have averaged more than $4 per gallon for 22 consecutive days.
The national average price of diesel fuel, used extensively to power industry, trucking, and railroads, has risen about 52% from the year prior to more than $5.51 a gallon on Tuesday. In Texas, Florida and Arizona, diesel costs have jumped by more than 60% year-over-year.
Can confirm; diesel fuel here in Alaska, where we are literally sitting on an ocean of petroleum, is nearing $6 a gallon. We just had our heating oil tank filled, and the heating oil was $6.30 a gallon. Of course, Alaska's primary issue is a lack of local refineries. We ship oil south, we ship gasoline and diesel back up — it's crazy.
Here's the silver lining:
While American drivers are feeling the pinch, costs remain significantly lower than in other global hubs like Paris and London, where high taxes push prices to approximately $8.20 and $7.50 per gallon, respectively. In Asian markets, consumers in Seoul paid $5.23 per gallon earlier this week, while the price in Tokyo sat at $4.75.
In India, the government has shielded consumers by pressuring state-run refiners to freeze prices at approximately $3.86 per gallon in New Delhi, even as those companies reportedly lose nearly $200 million a day. This artificial stability stands in contrast to the U.S. market, where prices remain tethered to global volatility despite high domestic output.
And, yeah, still small comfort. We saw recently how events in the Strait of Hormuz are causing some see-sawing in oil prices, and if we can manage some kind of conclusion to the war with Iran, with Middle Eastern production safe and the tankers flowing, prices should work their way back down again. In the meantime, yes, consumers aren't happy.
The war’s impact on the consumer is uneven to be sure. Debit and credit card spending was up in March, the most in more than three years, according to Bank of America, with a 16.5% jump in spending at gas stations the biggest factor, but there also was growth of 3.6% excluding gas. Changes in tax law have pushed up the average IRS refund this year by over 11%, which is also a help.
But overall, Americans are having less “fun” as high gas prices and uncertainty shadow their discretionary spending. The impacts are being felt in the dollars spent on escape rooms, bowling alleys, and arcades.
Consider, though, what it means that the United States is now not only self-sufficient in oil and natural gas, but that we are a net energy exporter. We may have a price shock thanks to this fracas in Iran, but we don't have a supply shock. Unlike the late 1970s, there are no gas lines, no rationing, no quick looks at your license plate while wondering, "Can I buy gas today? How long will I have to wait in line?"
That oil crisis was mostly political, as is this one. And this spike in prices will pass. In the meantime, it serves as a great reminder that everything in the economy depends on energy, on fuel, and that the prices of fuel affect everything else, every product, every commodity, every material, every service. And, we might remember the four years of Joe Biden, when gasoline prices were at about this same level, with no war in Iran.
English (US) ·