Gas prices across the United States are projected to reach record highs on Labor Day, with Indiana being the exception. The increase in fuel costs stems from recent geopolitical tensions and the ongoing war in Iran, which has affected global oil supplies.
According to GasBuddy, drivers might face an average gas price of $4.03 per gallon during Labor Day weekend. This marks an 87-cent increase compared to last year, making it the highest recorded Labor Day gas price.
As of Thursday morning, the national average gas price stood at $4.144 per gallon, continuing an upward trend from $4.100 a week prior, and $4.095 a month ago. The American Automobile Association (AAA) reported these figures as significantly higher than the $3.190 average from a year earlier.
California’s average price remains the nation’s highest at $5.782 per gallon, a stark rise from $4.606 the previous year. Hawaii and Washington also see averages surpassing $5 per gallon, further indicating regional disparities. On the other hand, Indiana reported the lowest statewide average at $3.448.
Gas Price Trends and Influencing Factors
GasBuddy’s projections for Labor Day suggest $4.03 per gallon as the national average. This rise comes after the previous record of $3.83 per gallon set in 2012 due to Middle Eastern tensions affecting oil supply.
U.S. drivers have experienced increasing fuel prices since the Iran conflict, which disrupted oil markets, notably closing the Strait of Hormuz. Prior to a joint strike by the United States and Israel on February 28, the national average was under $3 per gallon, at $2.98.
GasBuddy’s Patrick De Haan remarked on the challenging year for motorists, citing geopolitical uncertainties as the main barrier to price stability.
Comparison to Previous Years
On Labor Day last year, the average gas price was $3.19 per gallon, almost one dollar lower than current trends, based on AAA data. This was attributed to efforts by President Donald Trump’s administration to lower living costs, including fuel.
In 2024, average prices on Labor Day were reported at $3.29 per gallon by GasBuddy, highlighting fluctuations over subsequent years.
Gas Price Developments Under Joe Biden
Gas prices surged during Joe Biden’s tenure, posing challenges during his presidency and potentially affecting his 2024 campaign. When he took office in 2021, prices were approximately $2.4 per gallon but climbed to over $3 by December. By June 2022, amid pandemic repercussions and supply disruptions from the Ukraine conflict, prices peaked at $5.06 per gallon.
In 2023 and 2024, prices remained below this peak due to improved oil market conditions, with averages reported at $3.52 and $3.30 per gallon respectively.
Gas Price Dynamics During Trump’s First Term
Between 2017 and 2021, gas prices were low, averaging around $2.48 per gallon. Notably, in 2020, prices dropped to $2.19 due to reduced demand during the COVID-19 pandemic. Such trends gave Trump leverage in his criticism of Biden’s handling of fuel costs during his 2024 campaign.
Despite his pledge to reduce gas prices below $2, Trump’s administration saw prices fall below $3 prior to recent conflicts. Current increases of over 30 percent are attributed to ongoing Middle Eastern struggles.
At a rally in August, Trump justified higher prices as necessary for preventing the nuclear armament of Iran.