The U.S. national average gasoline price hit about $4.47 a gallon on Sept. 18, up 4% in a week, while diesel set a fresh record at $6.4776 a gallon. Refiners' seasonal price cuts, which normally bring gas prices down roughly 10% between September and December, look unlikely to repeat this year, and forecasters warn pump prices could keep climbing into the holidays.
Gasoline and diesel keep climbing
The national average gasoline price stood near $4.47 a gallon on Sept. 18, up 4% from a week earlier, according to AAA and GasBuddy data. That price is up around 57% since the start of the year.
Diesel is faring worse. It reached a record $6.4776 a gallon on Sept. 18, up 6.5% in a week and 79% year to date, breaking its old 2022 peak of $5.815 and marking its 13th new high since Sept. 4. Diesel is the dominant fuel in trucking, agriculture, construction and mining, so its cost feeds directly into shipping and food prices.
Demand softens as prices bite
Even so, U.S. gasoline demand in July and August 2026 ran about 1% below the same months a year earlier. Heading into summer, the Los Angeles Times reported many indications that families planned to substitute long vacation trips with shorter excursions.
Jeff Currie, former head of commodities research at Goldman Sachs, said retail gas prices may reach $5 a gallon around the Nov. 3 midterm elections. The U.S. Energy Information Administration, by contrast, is forecasting retail gasoline will average $3.95 a gallon in the fourth quarter.
War in the Gulf upended forecasts
Before this year, GasBuddy had projected the 2026 U.S. average retail gas price at about $2.97 a gallon. That changed after war between the United States and Israel and Iran broke out on Feb. 27, disrupting global crude oil markets. The conflict has cut shipments through the Strait of Hormuz, which carried about 20% of the world's daily crude oil supply before the war.
JPMorgan Chase has declined to predict how the war will end. According to TheStreet: "We simply don't know how to model the endgame."
Ukraine's drone strikes on Russian oil refineries have also forced Russia to cut diesel exports to Western Europe, while China, the top buyer of Iranian oil, has had to return to the open market after drawing down its own reserves.
Source: TheStreet
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