BlockBeats, September 5 — According to the American Automobile Association, the U.S. average retail diesel price broke through $5.85 per gallon on Friday, surpassing the previous record set in 2022. Gasoline also rose to an average of $4.15 per gallon. The sustained surge in fuel prices is putting increasing pressure on the Trump administration's political pledge to "lower energy prices and reduce the cost of living."
The rise in diesel is quickly transmitting to the real economy. The U.S. Department of Agriculture estimates that farmers' fuel costs will rise by nearly 30% in 2026; food and logistics companies are already facing higher transportation costs. At the same time, U.S. diesel inventories have fallen to historic lows, and in the four weeks ending August 28, average daily diesel exports reached 1.77 million barrels, up about 31% year-over-year, further tightening domestic supply.
Supply-side improvements are unlikely in the near term. About 5 million barrels per day of global refining capacity is currently offline, with disruptions at the Strait of Hormuz, damage to Middle Eastern refineries, and attacks on Russian refineries continuing to compress global refined product supply. In October, the U.S. will also face seasonal demand from the autumn harvest, winter heating, and refinery maintenance.
In response to rising fuel prices, the Trump administration this week convened executives from oil refiners, urging them to boost capacity and considering building new refineries. But new plants cannot resolve short-term supply gaps, and more direct policy options, such as restricting diesel exports, are controversial. With less than two months until the U.S. congressional midterm elections, diesel prices have risen 56% since the outbreak of the U.S.-Iran conflict, becoming an unavoidable political risk for the Trump administration. If fuel prices continue to climb, Trump's signature "lower energy costs" policy card could instead become a source of political pressure before the midterms.