Gas prices are expected to reach record highs on Labor Day across the country, with the exception of Indiana, as U.S. drivers continue reckoning with weeks of increases spurred by the start of the war in Iran. Drivers might face an average gas price of $4.03 per gallon this Labor Day weekend, 87 cents higher than last year and the steepest Labor Day price for gas on record, according to fuel savings platform GasBuddy. And yet, this grim premise would actually represent a small relief for Americans, who are now paying more than that to fill their tanks.
As of Thursday morning, the national average gas price was $4.144 per gallon, up from $4.100 a week earlier, $4.095 a month earlier, and from $3.190 from a year earlier, according to the American Automobile Association (AAA). California drivers, as usual, are paying the highest gas price in the nation, at $5.782 per gallon—up from $4.606 a year earlier. Two other states, Hawaii and Washington, have averages above the $5 mark, at $5.410 per gallon and $5.472 per gallon, respectively.
The lowest statewide average in the country was paid by drivers in Indiana, at $3.448. In its predictions, released on Tuesday, GasBuddy said it expects average gas prices to reach $4.03 per gallon on Labor Day weekend, the last holiday weekend of the summer. That would be up by 87 cents compared to the same time a year ago, representing the highest Labor Day price at the pump on record in nominal terms.
The previous record of $3.83 per gallon was reached in 2012, as tensions in the Middle East and supply disruptions drove up prices across the world and the United States. For U.S. drivers, it is yet another slap in the face after months of higher prices following the start of the war in Iran, which caused geopolitical volatility and disruptions in the oil supply market, with the effective closure of the Strait of Hormuz. Before the United States and Israel launched a joint strike on Iran on February 28, the national average gas price was just below $3 per gallon, at $2.98 per gallon.
This year has been less about typical supply and demand, and more about uncertainty over how global tensions will affect the availability of crude oil and refined products.” On Labor Day last year, which fell on September 1, the national average gas price was $3.19 per gallon, nearly one dollar lower than it is today, according to AAA data. It was, at the time, an achievement for President Donald Trump and his administration, after he campaigned in 2024 with the promise of lowering the cost of living for everyday Americans, including bringing down the cost of gas, which had risen significantly during the Biden administration. Only a year earlier, in 2024, the national average gas price on Labor Day had been $3.29 per gallon, according to GasBuddy data, below both 2023 ($3.77 per gallon) and 2022 ($3.79 per gallon) levels.
This year, the projected average on Labor Day—and the current nationwide price—cannot be compared to any of the past four years, including when former President Joe Biden was in office. The surge in gas prices under his administration became a pivotal issue for Biden during his last two years in office, and likely one that hurt his 2024 presidential run, before he ended his campaign. When Biden took office in January 2021, gas prices were an average of $2.4 per gallon nationwide, according to historical data from the U.S.
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