Diesel, Gasoline Prices Hit Record August Highs

According to AAA data, US gasoline and diesel prices have reached record seasonal highs in August, with drivers paying an average of $4 per gallon for gasoline and $5.40 per gallon for diesel. This is a significant increase from the same time last year, when gasoline cost $3.20 per gallon and diesel was $3.70 per gallon. The higher prices are attributed to constrained global fuel supplies due to the Iran conflict and Russia-Ukraine war, as well as multiyear lows in US gasoline inventories. The Energy Department expects gasoline and diesel prices to ease later this year, but forecasts remain well above seasonal norms. The Department of Energy forecasts that gasoline will cost an average of $4 per gallon this quarter and then drop to $3.72 in the fourth quarter, while diesel prices will fall to just shy of $5 by the end of the year. These forecasts mark a major upward revision from a month ago. The soaring fuel costs are likely to be a key issue for both drivers and politicians in the second half of the year, especially with midterm elections approaching in November.