Breaking Down the Factors Behind Gasoline Prices in the U.S.

Sun, 03 May 2026 02:36:00 +0200

The U.S. Energy Information Administration projected that nationwide retail gasoline prices would average $4.30 per gallon in April 2026, marking the year's peak monthly average. Gasoline prices are determined by four main components: crude oil, refining, distribution and marketing, and taxes. In early 2026, crude oil accounted for roughly half of the total cost, driven by global oil market dynamics and exceptional supply shocks, such as the war in Iran disrupting shipments through the Strait of Hormuz. Refining also plays a significant role, particularly in states like California, where stricter environmental regulations, unique fuel formulations, and limited refinery competition keep prices 20 to 30 cents above expected levels. Distribution and marketing costs cover pipelines, shipping, labor, credit card fees, and branding, while taxes, both federal and state, add another 18% to the pump price. Policies like gas tax holidays and temporary Jones Act waivers provide limited relief to