U.S. gasoline and diesel retail prices hit record highs; energy secretary says "may last for several weeks."
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The energy shock triggered by the US-Iran war continues to pass through to the consumer end. US oil retail prices have risen to the highest level for this time of year in history, further pushing up inflation and placing severe pressure on the upcoming summer travel season.
According to data from the American Automobile Association (AAA), the nationwide average gasoline price reached $4.12 per gallon on Monday, surpassing the $4.07 set during the 2022 oil price surge caused by the Russia-Ukraine war. The average diesel price stands at $5.65 per gallon, more than 60 cents higher than the historical high in the same period of 2022.
Since the end of February, when the US and Israel launched military strikes against Iran, US gasoline prices have risen by more than $1.10 per gallon. Although there has been some optimism about prospects for US-Iran ceasefire negotiations and retail oil prices have slightly eased recently, they remain at high levels overall.
US Energy Secretary Chris Wright said in an interview with Fox News on Tuesday that gasoline prices may remain high for "the next several weeks."
The US Energy Information Administration’s forecast last week supports this view: if the conflict ends in April, the nationwide average retail gasoline price is expected to reach $4.16 per gallon in the second quarter, then gradually fall to $3.55 per gallon in the fourth quarter. This means that even if the situation eases, consumers will still face fuel costs higher than the same period in previous years for quite some time.
High diesel prices have an especially broad impact on the economy. As the main fuel for freight, agriculture, and industrial production, rising diesel costs directly push up prices of end-consumer goods such as food and logistics, and the ripple effect is already reflected in inflation data.
Meanwhile, rising jet fuel costs have also fed into higher air ticket prices, adding further pressure to the busy summer travel season. Analysts point out that if energy prices remain at current levels, it will further squeeze consumers’ disposable income and pose obstacles to the overall economic recovery.
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