Affordability is getting worse, especially if you have to drive to work or anywhere else.
By late September, the total cost of the higher gas and diesel prices triggered by President Trump’s war against Iran exceeded $103 billion, according to my organization’s analysis of the federal government’s energy data. And those higher prices aren’t showing any sign of slowing. If current trends hold, the price tag by the end of this year will approach $180 billion.
For the average household, that comes out to $750 extra so far, and that figure is on pace to top $1,300 by year’s end.
For a family of four with two drivers, those costs are even higher, topping $1,000 already and slated to be over $1,700 by the end of the year if the war continues. Our interactive tool, online at itep.org/iran-war-fuel-cost, lets you punch in your region and household size to get a sense of how much your family’s costs are rising.
To be clear, this isn’t the cost of the weapons and soldiers fighting the war, which the Pentagon estimates to be around $44 billion. This is the higher cost you’re paying to fill up your gas tank and to buy products that cost more to move.
In a normal year, fall is when drivers get some reprieve at the pump. As summer travel winds down, demand for gas falls, and prices should fall too. But not in 2026.
According to AAA, Americans have never paid this much for gas at this time of year. The national average gas price is $4.47 per gallon as of this writing, and a growing number of states are seeing average prices top $5 per gallon.
Equally troubling is the sky-high price of diesel fuel, which has hit record highs this year and now stands at $6.45 per gallon. When diesel prices rise, the cost of making and shipping products rises too. While most of us don’t buy diesel fuel ourselves, this raises the cost of everything else, bumping up the high rate of inflation we’ve already been seeing.
These soaring fuel costs hurt businesses, local governments, and families.
Businesses have had to shell out $48 billion extra for motor fuel this year, mostly on diesel, because of the Iran War.
Local governments also feel the squeeze. Higher fuel prices make it more expensive to operate school buses, garbage trucks, construction equipment, fire trucks, police cars, and other vehicles and machinery. So far this year our local and state governments have had to pay over $2.7 billion extra for fuel because of the Iran War, and we expect that figure to top $4 billion by the close of the year. This expense, of course, ultimately falls on local taxpayers.
These expenses come on top of other new costs for households like rising interest rates, the Trump administration’s widespread tariffs on products you buy every day, and high healthcare prices, made worse by cuts to government programs like food assistance and Obamacare.
If life feels more expensive today, that’s because it is. The higher price you’re paying for gas because of the Iran War isn’t the whole reason for that. But it sure doesn’t help.
