Gasoline Prices Hit Record August High as $4 Fuel Could Haunt Drivers Through Winter

US drivers are paying more for gasoline (petrol) this August than in any August on record, and government forecasts show the pain locking in through winter, with the national average stuck near $4 (£2.96) a gallon (3.785 litres) into the new year.

Highest August on Record

Data from the American Automobile Association (AAA) put the national average for regular gasoline at $4.06 (£3) a gallon on 17 August, the highest reading for the month in decades of record-keeping.

Prices have now spent 103 days this year, 46% of 2026 so far, at or above $4 a gallon, according to Patrick De Haan, head of petroleum analysis at GasBuddy.

He said the average has never sat above $4 this late in a calendar year, leaving drivers in unfamiliar territory for the close of summer. A year ago, the same tank of fuel cost about $3.20 (£2.37) a gallon. The current run is the year's second stretch above $4, after prices dipped below in June and July.

Why Winter Won't Bring Relief

The outlook offers little comfort. The US Department of Energy expects gasoline to average $4 a gallon this quarter before easing to $3.72 (£2.75) in the final three months of the year, a level still well above seasonal norms.

Diesel, the fuel that moves most freight, is running even hotter at a record $5.40 (£3.99) a gallon and is forecast to stay just shy of $5 into December. Because nearly everything on store shelves arrives by truck, those costs filter through to grocery bills and other prices households already find hard to manage.

Families hoping for a post-summer breather at the pump are unlikely to get one, with high prices set to hold through the holidays.

The Iran War Behind the Pain

The squeeze traces back to the war in Iran. Gasoline averaged $2.98 (£2.20) a gallon on 26 February, two days before US and Israeli forces launched strikes on Iran, AAA figures showed.

Disruption to shipping through the Strait of Hormuz, the channel carrying roughly a fifth of the world's oil, sent crude sharply higher and dragged pump prices up more than a dollar within weeks. Traffic through the waterway remains disrupted, keeping a premium on global oil and leaving little room for pump prices to fall quickly.

Crude has since settled near $80 (£59) a barrel, yet supply stays tight. Government data released on 12 August showed US gasoline stockpiles at their lowest level since November 2025.

Where Drivers Feel It Most

The burden falls unevenly. California drivers pay the most at $5.58 (£4.12) a gallon, while Louisiana sits at the bottom at $3.57 (£2.64), an AAA state breakdown showed.

Americans drive about 3 trillion miles a year, so every extra cent at the pump pulls more money from household budgets.

Tom Kloza, chief oil analyst at Gulf Oil, told Yahoo Finance the closing months of 2026 will be far pricier than in past years, tipping pump prices of $3.60 (£2.66) to $3.90 (£2.88) a gallon by the autumn midterm elections, which would be the highest ever for that point in the year.

For households already stretched by higher grocery and heating costs, the breather expected after the summer looks set to stay out of reach until well into next year.