As of August 25, 2025, U.S. gas prices averaged $3.15 per gallon, down 5% from the same period last year, thanks to falling crude oil prices and increased global supply. Prices are expected to drop further through December, aided by the seasonal switch to cheaper winter-grade gasoline, according to the US Energy Information Administration. While most regions are seeing lower prices, the West Coast remains an exception due to tight supply, higher taxes, and costly fuel standards. The EIA writes:
On August 25, 2025, the Monday before Labor Day weekend, the retail price of regular gasoline averaged $3.15 per gallon (gal) across the United States, 5% (or 17 cents/gal) lower than at the same time last year.
The cost of crude oil typically accounts for a little more than half of the retail gasoline price. Falling crude oil prices, driven by increasing global crude oil supply, have contributed to lower retail gasoline prices heading into this Labor Day. From August 1 to August 25, Brent crude oil prices averaged $67 per barrel, about 15% less than in August 2024.
We forecast gasoline prices will decline 11%, or about 35 cents/gal, from August to December. The forecast decline is driven by our expectation that crude oil prices will fall, caused by continued oil supply growth. In addition, the annual transition to winter-grade gasoline allows refiners to use less expensive components to produce gasoline, further contributing to lower gasoline prices.
U.S. gasoline prices vary regionally, reflecting local supply and demand conditions, state fuel specifications, and state taxes. The West Coast is the only U.S. region where gasoline prices are higher headed into Labor Day this year than last. Retail gasoline prices are usually the highest on the West Coast because of:
The region’s limited connections with other major refining centers
Tight local supply and demand conditions
Higher-than-average state taxes in several West Coast states
Gasoline specifications for California that make gasoline more costly to produce
By comparison, gasoline prices on the Gulf Coast are usually the lowest of any U.S. region. Gulf Coast states are home to more than half of U.S. refining capacity, and more gasoline is produced than is consumed in the region. Gulf Coast states also have lower gasoline taxes than the national average.
