Diesel prices hit record highs over the Labor Day holiday alongside record gas prices for consumers. A leading expert thinks both prices could continue to go higher as the war with Iran wages on, including diesel prices hitting an unthinkable amount.
Diesel Prices to Keep Going Up
Diesel prices hit a Labor Day record national average of $5.87, and that could be just the beginning of a rally heading into the winter months. The higher prices could lead to higher costs for transportation companies and prompt a decision about whether to pass those costs on to consumers.
While the national average is around $6 per gallon at the time of writing, some areas are seeing higher rates. The state of California is near $8 per gallon, prompting market expert Patrick De Haan to imagine a worst-case scenario.
"The real story may be out West – California could blow past $8/gal, and some pumps aren’t even built to display what could come next," De Haan tweeted.
What De Haan is referring to is the possibility of $10 per gallon in states like California. Current displays at most gas stations likely only have the capacity for single digits and two decimal places, which means a diesel price of $10 per gallon would require finding a way to display it.
This author remembers when the price of regular gasoline hit $2 per gallon in Michigan. Some gas stations in the state had only a place for the 1, a decimal and two places, meaning the highest they could show in graphics was $1.99. This led to custom tape jobs on gas station signs to show a price higher than $2.
Diesel prices are already weighing on consumers, the economy and the minds of voters. Hitting the $10 level in any state and seeing images of customized signs could further dampen things.
Right now, the average diesel price in the U.S. is around 60% higher than a year ago, according to De Haan, with prices up an average of $2.19 per gallon.
Higher Gas Prices Impact Consumers
Previously, regular gas prices were in the headlines, but now, due to new records, diesel prices are.
On Tuesday, De Haan said the national average price of diesel was $5.90 and likely to hit $6 per gallon for the first time ever in the "next week or so."
While higher diesel prices may not impact consumers directly right away, it could have a trickle-down effect from companies raising prices, similar to what tariffs caused earlier this year.
The price of regular gas hit a new national average high of $4.09 on Labor Day. Regular gas has a much more direct impact on consumers, with higher prices at the pump, meaning some changes are being made.
Earlier this year, consumers said they were considering spending less money at restaurants or on groceries to offset the higher prices at the gas pump.
Consumers were also spending more time at warehouse locations like Sam’s Club and Costco to get cheaper gas prices as a membership perk.
President Donald Trump recently said that the price of gas could fall back to $2 per gallon when the war with Iran is over. There is no timetable on when this could happen and right now consumers are likely to continue to feel the impact of both regular gas and diesel prices rising.
US Stock Price Action
The United States Oil Fund (NYSE:USO) is up 1.2% to $143.69 on Tuesday versus a 52-week trading range of $65.99 to $154.09. The fund is up 108.4% year-to-date in 2026.
Image via Shutterstock
Login to comment