Gasoline in California officially hit $6 per gallon on Thursday, making it the most expensive state to fill up as prices at the pump continue to climb.
California’s average of $6.01 per gallon is followed by Nevada, Oregon, and Washington, all of which have surpassed the $5 threshold.
The national US average rose to $4.30 per gallon on Thursday, up $0.07 from the previous day and the highest since July 2022, according to AAA data.
Drivers are spending more on fuel as the Middle East conflict has pushed oil prices to around $105 per barrel amid a deadlock between the US and Iran.
Read more: How oil price shocks ripple through your wallet, from gas to groceries
“Since March 1, Americans have spent $21.7 billion more on filling their tanks with gasoline,” Patrick De Haan, head of petroleum analysis for GasBuddy, wrote on X on Thursday.
Crude prices eased on Wednesday, with Brent crude futures (BZ=F) falling below $110 a barrel. West Texas Intermediate (CL=F) hovered near $105 as traders assessed the possibility of a prolonged blockade in the Strait of Hormuz, which has become a flash point of the Middle East conflict.
Economists are weighing how long energy prices can stay elevated before impacting the broader economy and whether higher inflation is here to stay.
The Personal Consumption Expenditures price index (PCE) jumped 0.7% last month, the largest gain since June 2022, according to data from the Commerce Department’s Bureau of Economic Analysis.
On Thursday, analysts at Deutsche Bank noted, “today marks a significant, and perhaps unsettling, milestone for the US economy,” as headline and core PCE inflation will have been above 2% for five consecutive years.
“This raises a critical question for investors and policymakers” of whether the US is “in a new inflationary regime,” or is this still merely “transitory.”
On Thursday, the Federal Reserve voted to hold interest rates unchanged in an 8-4 decision.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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