California is back over $5. Prices in Texas jumped by 25% month to month, to over $3.23.
By Wolf Richter for WOLF STREET.
The average retail price of gasoline, all grades combined, at gas stations on Monday spiked by $0.49 from the prior week, by $0.60 from four weeks ago, and by $0.73 (+25%) from the low point in January, to $3.63, the highest since June 2024, according to EIA data released this morning, based on a survey of gas stations on Monday.
Year-over-year, gasoline is up by 14%. These prices will enter into the inflation calculations for the Consumer Price Index (CPI) and the Fed-preferred PCE price index for March, to be released in April.
The three-and-a-half-year long zig-zag decline in gasoline prices — from over $5 at the top of the spike in mid-2022, to the low point in early January of $2.91 — was a substantial contributor to the cooling of overall consumer price inflation rates. That has now flipped, and gasoline prices will cause inflation rates to accelerate, instead of slowing them.
Consumers don’t buy crude oil, and the historic spike in the maniac futures market for crude oil and then the huge plunge on Monday to still high crude oil prices don’t enter into consumer expenditures and inflation measures.
But retail gasoline prices do, and they do it directly. And diesel prices – which matter directly only to a small number of consumers with diesel-powered vehicles – feed into transportation costs which tend to feed into the costs of goods and services.
The current spike comes on top of the increases that started in January, bouncing off the low point of $2.91 on Monday, January 12. This chart shows a close-up of the situation:
Gasoline prices vary widely by state. Here is a sample of states, average retail price, all grades, on Monday March 9, and on Monday February 9, and the month-to-month percentage increase.
| Average gasoline price by state | Mar 9 | Feb 9 | % MoM increase |
| California | $5.21 | $4.43 | 17.7% |
| Washington | $4.61 | $3.96 | 16.6% |
| Colorado | $3.59 | $2.83 | 27.1% |
| Florida | $3.57 | $2.90 | 23.2% |
| Ohio | $3.55 | $2.83 | 25.4% |
| New York | $3.48 | $3.00 | 15.9% |
| Massachusetts | $3.47 | $3.03 | 14.7% |
| Minnesota | $3.33 | $2.77 | 20.0% |
| Texas | $3.23 | $2.57 | 25.7% |
And the price varies by city. Here are some major cities, average retail price, all grades, on Monday March 9, and on Monday February 9, and the month-to-month percentage increase:
| Average gasoline price by City | Mar 9 | Feb 9 | % MoM increase |
| San Francisco | $5.39 | $4.59 | 17.3% |
| Los Angeles | $5.19 | $4.38 | 18.4% |
| Seattle | $4.80 | $4.20 | 14.4% |
| Chicago | $3.73 | $3.19 | 16.8% |
| Miami | $3.62 | $2.97 | 21.9% |
| Denver | $3.60 | $2.84 | 27.0% |
| Boston | $3.53 | $3.07 | 15.1% |
| Cleveland | $3.51 | $2.91 | 20.7% |
| New York City | $3.48 | $2.96 | 17.5% |
| Houston | $3.17 | $2.53 | 25.3% |
The average retail price of diesel at gas stations on Monday spiked by nearly $1 from the prior week and by $1.40 (+40%) from the low point on January 12, to $4.86, the highest since October 2022.
Year-over-year, diesel is up by 36%.
Only a small portion of consumers drive vehicles with diesel engines – some pickups and SUVs, and some older European imports. So diesel prices weigh relatively little in the consumer price inflation measures, unlike gasoline.
But diesel prices feed into transportation costs, which feed into prices of goods and services down the line, and some of them may make it into the prices that consumers pay for goods and services, which will show up as inflation with a delay.
These prices at gas stations on Monday had zero to do with any imagined supply issues, since gas stations were jacking up prices of the fuel that was already in their tanks paid for at prior prices, and so the profit margins of gas stations just spiked. They do that because they can. Consumers, befuddled by all the stuff in the crisis-media, submit to those higher prices and pay them. Gas stations will pay more for their new supply of gasoline as refiners jack up their prices, and their costs will go up, and they’ll hike prices until consumers begin to aggressively shop around for deals, and cut back some on consumption, which will cause gas stations that are losing business due to their pricing to back off.
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Filled up premium at Costco in Dallas yesterday — $3.47 – thanks for reporting the details behind the madness and clickbait.
Gas a month back was $2.37 when I was in Appleton. Yesterday in Green Bay it was $3.19.
I have a friend who is an executive with Outback Steakhouse and I asked him one time what was the single largest factor that determines the overall health of the restaurant industry. His answer surprised me. It wasn’t the economy or inflation or any of the typical factors one would think that it would be. It was the price of gas. He said there is a direct correlation between gas prices and the number of people that ate at his restaurants and others like it. It is so accurate he doesn’t pay attention to hardly anything else when it comes to forecasting sales.
I stopped eating at the Outback when their steaks became disappointing about two decades ago. The old tired chain, acquired by Bloomin’ Brands, has closed dozens of restaurants in 2024 and 2025 trying to cut costs and survive. Bloomin’ Brands revenues [BLMN] have dropped by 10% since 2022, despite big price and cost increases in the restaurant sector.
It would make sense for some people who have to drive some distance to get to a restaurant to reduce discretionary driving, such as to restaurants. Not only would they save the extra $0.50 on gas compared to a month ago, but they’d save the cost of the entire dinner, and eat healthier food at home. But I cannot image people forgoing hot dates just because it’ll cost them $0.50 more in gas than it did a month ago. That’s against human nature.
When you were in the car business did the price of gasoline influence show room traffic or auto sales?
No, but when the price spike lasted long enough, it did shift interest to more fuel efficient vehicles. People started paying attention to MPG ratings… These days I would think that a longer-lasting price spike in gasoline would accelerate sales of hybrids and EVs.
I think that the restaurant manager’s point is that ALL of their driving reduces spending cash they have for luxuries like eating out. Not just the cost of driving to the restaurant for that one meal.
Frankly, I can see his point… margins are surprisingly slim in a lot of businesses. I remember during the Financial Crisis that the biggest Jiffy Lube franchisee with a few hundred stores declared bankruptcy because people weren’t changing their oil as frequently. Going 3500 miles instead of 2500 won’t really hurt a modern car but if too many people do it they can REALLY hurt the oil change businesses.
Bond markets don’t see to be reacting much to higher oil prices. Only 4.11% 10 yr.
Regarding gas stations increasing sale price of what they have, local gas station quoted as saying current price is predicated on likely price of next delivery. Might be an excuse, but might be a cash flow thing too.
the current price is predicated on whatever they think they can get away with without losing sales to a competitor.
The cost of the actual fuel across the country is one thing. But I wish the public would get angrier at the added cost of the road taxes collected across the various States. Especially as one pays so dearly per gallon just to pull out of the fuel station and hit that big chuckhole that’s just getting bigger.
In WA that amount of road tax just keeps increasing. I have no interest in typing in how much ‘gas’ costs here without separating out the road tax. When the cost of the actual fuel does go down the total per gallon is still ridiculous.
I live on the Gulf Coast where gas is pretty cheap (due to nearby refineries) and protections against price gouging are pretty robust (due to hurricanes). The cheapest station in my area was at $2.26 per gallon before the bombs started dropping on Iran (this time) and held that price for about three days before it spiked I guess they had a few deliveries of tanker trucks in that time… and I definitely filled all of my family’s cars at the lower price.
BUT… and it is a BIG but… I had a Commanding Officer of one of my Reserve units who owned a few gas stations in the northern part of the state and he told me that the authorities focus on policing the price hikes but the actual collusion between stations (“if it happens” according to him) is when they don’t drop the retail price when the wholesale price drops. A lot of profit gets made in holding onto a penny or two extra for a few days.
Oh… I left out that the price shot up to $2.99 where it still is today.