U.S. gasoline prices slip below $4 as inflation stays elevated
Average regular gasoline fell to $3.98 per gallon, the first sub-$4 reading in three months, while consumer prices rose 0.4% in October.
The national average price of regular gasoline dropped to $3.98 a gallon on Tuesday, according to data from the American Automobile Association, marking the first time in three months that the price fell below $4. The decline follows a 38-cent fall over the past month and is attributed to lower crude oil prices, a seasonal shift to a cheaper winter fuel blend, and reduced demand as temperatures cool.
Consumer prices in October rose 0.4% from the previous month, a pace that exceeded analysts’ expectations, according to a Labor Department report released the same day. Housing costs accounted for roughly one-third of the monthly increase, while grocery prices also rose sharply.
"Temperatures are getting colder," said Patrick De Haan, a petroleum analyst at GasBuddy. "People who have boats and RVs are probably done for the year. I would say, by Thanksgiving, so long as we don't get any wild cards geopolitically, the national average could be $3.75 a gallon."
Diesel fuel prices fell more slowly, reaching an average of $6.15 per gallon, down about 13 cents from a month earlier. De Haan noted that reduced Russian diesel exports, a result of damage to Russian refineries amid the war in Ukraine, keep diesel prices elevated.
"When a country like Russia isn't exporting diesel, that is very impactful for the global market. So diesel prices – they will come down but they will still remain very elevated," De Haan said.
Higher diesel costs are also raising heating oil prices in the Northeast and increasing freight charges, which economists say are being passed on to consumers.
"You're starting to see higher freight costs get passed through," said Mike Reid, an economist at RBC Capital Markets. "We've seen it show up notably in goods that are heavily imported — apparel, recreation goods, IT equipment."
Federal Reserve official Chris Waller, speaking before the inflation data release, warned that energy-related price shocks could have longer-lasting effects on inflation than previously thought and suggested that the central bank might need to raise interest rates more aggressively.
The October inflation report did not include a year-over-year comparison because price data for October 2025 were not collected during last year’s government shutdown. The Cleveland Federal Reserve Bank had previously estimated a 3.7% year-over-year increase, outpacing average wage growth of 3.1%.