Washington: Fuel prices in the United States have climbed sharply as the six month U.S.-Iran conflict continues to disrupt energy markets and create pressure on global oil and refined-fuel supplies.
U.S. retail diesel prices reached around $6.45 per gallon, according to AAA data reported on September 18, marking a record high. The latest U.S. Energy Information Administration (EIA) weekly data showed the national average at $6.285 per gallon for the week ending September 14. The difference reflects different reporting dates and sources.
At an exchange rate of roughly ₹90-₹92 to the US dollar, $6.45 per gallon works out to approximately ₹153-₹157 per litre.
California prices cross $8 per gallon
- California is facing even higher diesel prices.
- EIA data shows California’s average diesel price reached $8.039 per gallon on September 14. That is roughly equivalent to ₹191-₹195 per litre at an exchange rate of ₹90-₹92 per US dollar. Some individual locations can be higher.
- The increase is significant compared with a year earlier. EIA data shows the national diesel average was about 68% higher than a year ago, according to Reuters.
Why diesel prices are rising
- The increase is being linked to several factors rather than a single cause.
- The ongoing U.S.-Iran conflict has disrupted energy flows in the Middle East, while attacks on Russian refining facilities have also reduced available fuel supplies. Refinery disruptions in the Middle East have added further pressure.
- The International Energy Agency said on September 18 that renewed fighting had caused further disruption to Middle Eastern oil exports. It also warned that commercial inventory buffers were being depleted rapidly if Gulf supplies remain constrained.
- The Strait of Hormuz remains a major concern because it is one of the world’s most important routes for oil and gas shipments. Although some alternative routes and partially restored flows have provided relief, energy markets remain vulnerable to further disruption.
Higher diesel costs could affect food prices
- Diesel is particularly important for the U.S. transportation and agricultural sectors.
- Farmers use diesel powered tractors, combines and other machinery, while trucks rely heavily on diesel to move agricultural products and other goods across the country.
- Reuters reported that U.S. farmers are already facing sharply higher fuel costs during the harvest season. One farmer cited by Reuters expects to spend as much as $1,500 a day to fuel a single combine, about twice last year’s cost.
- Higher fuel costs can also increase the expense of transporting food from farms to processing facilities, warehouses, supermarkets and consumers. Refrigerated transportation for products such as vegetables, dairy and meat is particularly sensitive to fuel costs.
- However, higher diesel prices do not automatically mean an immediate equivalent increase in grocery prices. Economists quoted by Reuters said the effect can take months to appear because retailers and existing freight contracts can temporarily absorb some of the additional costs.
US fuel is not tax-free
- Claims that American fuel prices contain “almost zero tax” are misleading.
- According to the EIA, as of January 2026 the United States had a 24.40 cent per gallon federal tax on diesel, while the average state taxes and fees added another 35.50 cents per gallon. The exact amount varies by state.
- Therefore, the current high U.S. fuel prices are not simply the result of taxation. International crude prices, refinery capacity, supply disruptions and transportation conditions are major factors.
Oil prices remain under pressure
- Brent crude closed at around $104.87 a barrel on September 18, while U.S. West Texas Intermediate crude ended around $100.30 a barrel, according to Reuters.
- The IEA has warned that if Middle Eastern supplies remain restricted and inventories continue falling, the oil market could face additional pressure in the coming months.
- The current situation therefore extends beyond gasoline stations. Prolonged high energy prices could affect transportation, farming, manufacturing and consumer prices in the United States and other countries.
Business Galaxy Fact Check
- The claim that U.S. diesel has reached around $6.44-$6.45 per gallon is genuine, although the exact figure depends on the source and reporting date.
- The claim that California diesel has crossed $8 per gallon is also supported by EIA data.
- However, statements that U.S. fuel has “almost zero tax” or that America’s fuel reserves are simply “running out” should not be presented as established facts. The IEA says emergency stocks and other supply measures have provided a cushion, but commercial inventory buffers are now under pressure.
- The U.S.-Iran conflict and the disruption around the Strait of Hormuz are important contributors to the current energy market pressure, but the rise in diesel prices is also being influenced by Russian refinery disruptions, Middle Eastern refining problems and broader global supply constraints.
