U.S. Gas Prices Enter Labor Day Weekend Near $4 a Gallon as August Sets a Costly Milestone

Gasoline prices are entering the Labor Day travel weekend at roughly $4 a gallon nationwide, extending a costly summer for U.S. drivers and pushing August toward a record as the most expensive month of its kind.

AAA listed the national average for regular gasoline at $4.0954 a gallon on Tuesday, September 1. The Energy Information Administration’s latest weekly data, released the same day, put the U.S. average for all grades and formulations at $4.207 a gallon for the week ending August 31. The two figures measure different price samples and categories, but both show fuel costs remaining well above normal late-summer levels.

AAA said in an August 27 update that the national average was about $4.09 a gallon, roughly one cent below the prior week. The organization said crude oil prices were holding near $80 a barrel amid continued volatility affecting shipments through the Strait of Hormuz.

The regional spread is especially wide. AAA data for August 31 showed Indiana with one of the lowest state averages, at about $3.39 a gallon, while California and Hawaii were among the highest at approximately $5.68 and $5.42, respectively. Differences reflect transportation costs, refinery configurations, taxes and local market conditions, in addition to the price of crude oil.

Diesel remains a larger burden for trucking, agriculture and other commercial users. Federal data cited by the St. Louis Federal Reserve showed the national weekly diesel average at $5.599 a gallon for the week ending August 31, down from $5.652 the previous week but still well above gasoline prices.

The immediate outlook is uncertain. The Energy Information Administration said retail fuel prices are driven primarily by crude oil costs and the balance between petroleum supply and demand. Its August Short-Term Energy Outlook said U.S. commercial crude inventories were expected to remain below the five-year average through the end of 2026, while high refinery runs and reduced net imports were adding pressure to supplies.

At the same time, the agency expects seasonal factors to eventually ease some pressure. Refiners typically shift operations after the summer driving season, and gasoline demand generally declines as vacation travel fades. EIA’s August forecast projected crude oil inputs to refineries would fall below 16 million barrels a day on average in October as seasonal maintenance increases.

That does not guarantee an immediate drop at the pump. EIA’s outlook assumed oil shipments through the Strait of Hormuz would remain severely constrained through August, with flows increasing only gradually in September. It forecast Brent crude at around $85 a barrel in the third quarter of 2026 and said inventories would need to rebuild before prices could move materially lower.

For drivers, the result is a holiday weekend in which timing and location could make a noticeable difference. AAA’s state figures show that consumers in the West Coast and parts of the Northeast are paying substantially more than motorists in some Midwestern and Gulf Coast states. For businesses, elevated diesel prices continue to raise transportation and operating costs even if gasoline prices begin their typical autumn retreat.

The next major benchmark will come from the EIA’s weekly release scheduled for September 9. Until then, the national averages are likely to remain sensitive to developments in global shipping, refinery operations and the pace at which U.S. fuel demand cools after Labor Day.