Elevated crack spreads and crude oil prices contribute to higher prices at the pump

Gas prices are higher this year mainly because refiners are making less profit margin room, called a crack spread, which drives up the wholesale cost before it reaches the pump. Since May, that margin has run about $1 a gallon above 2025 levels, when it peaked near 60 cents. The main cause is tight gasoline supplies worldwide, driven by refinery disruptions in Russia, China, and the Middle East. That's pushed up the cost of gasoline the U.S. imports and increased demand for gasoline the U.S. exports. Since March, total U.S. gasoline imports have run 32% below the five-year average, with some of the gap made up by shipments from the Gulf Coast under special shipping rule exceptions.

Diesel and jet fuel are being squeezed even harder, since the disrupted refineries abroad normally supply more of those fuels than gasoline. U.S. refiners have responded by shifting production toward diesel and jet fuel, which pay off better right now. As of late August, U.S. diesel inventories sat 14% below their five-year average, versus 6% below for gasoline.

Where you live matters a lot. On the Monday before Labor Day, the national average for regular gasoline was $4.07 a gallon. The West Coast was highest at $5.21, followed by the Rocky Mountains at $4.27. The Midwest averaged $3.85, the East Coast $3.94, and the Gulf Coast was cheapest at $3.62. These regional gaps come from local supply conditions, differing state fuel rules, and state taxes, so your area's price swings may not match the national trend.