Americans are paying $2 billion more for gas this Memorial Day weekend than they did last year

By Andrew Keshner and Myra P. Saefong

What the second most expensive Memorial Day ever for gas says about what to expect this summer

The Memorial Day weekend could break records for travel. But it's the second most expensive Memorial Day ever for gas. How long can Americans keep this up?

As Memorial Day weekend gets under way, gas is the most expensive it's been all year - and prices at the pump will likely go even higher before they retreat.

So will drivers finally crack under the pressure? What happens to their budgets as the buffer from higher tax refunds evaporates? The unofficial start of the summer travel season marks a major test for consumers and the economy. And the pressures on consumers caused by higher gas prices are about to get worse, experts say.

It's been almost three months since the Iran war led to the effective closure of the Strait of Hormuz. A tense cease-fire and ongoing diplomatic talks haven't offered much in the way of price relief.

Americans on Friday were paying $4.55 per gallon on average, according to AAA. That was a penny under Thursday's year-to-date high of $4.56. At this time last year, drivers were paying $3.19 per gallon.

Over the Memorial Day weekend, drivers will spend around $2 billion more on gas than they did last year, according to Patrick DeHaan, head of petroleum analysis at GasBuddy. There are 16 states that are likely to hit all-time highs for Memorial Day weekend gas prices, he added.

Even so, it could still be a record-breaking Memorial Day weekend for travel. More than 39 million people will drive and more than 3.6 million people will fly, which AAA said would be a new high.

It will be the second most expensive Memorial Day weekend on record for gas prices, according to DeHaan and other energy experts. Memorial Day weekend in 2022 was the most expensive, coming a few months after Russia's invasion of Ukraine. By mid-June 2022, gasoline prices had reached an all-time high of $5.01 per gallon.

When gas hit $5 nationally that year, it was the only time researchers at Inrix, a traffic data analytics company, ever clocked a decrease in Americans driving. This year, they wrote, "we still have no evidence of a broad behavioral shift."

So how will drivers react if gas prices were to break the 2022 record? That question could be answered this summer.

"If the Strait of Hormuz remains closed into mid-July, we could see the $5.01/gallon June 2022 price record exceeded," said Tom Kloza, chief energy adviser at Gulf Oil.

"In many years, one can count on paying less for gasoline in June and July than one pays on Memorial Day weekend," Kloza said. "This year is different," he added, because if U.S. inventory dips to 200 million barrels, "there could be all sorts of worries, particularly during hurricane season."

Drivers can expect big price swings ahead, DeHaan said. Last summer, gas prices were stable. "This year, it's going to be quite a bit of the opposite. Just a profound amount of volatility," he said.

White House spokesperson Taylor Rogers said price relief will happen once negotiations bring about an end to the Iran war. "President Trump and his energy team anticipated short-term market disruptions, communicated them openly to the American people, and implemented an aggressive plan to mitigate any impacts. President Trump will never allow Iran to possess a nuclear weapon, and he will continue to advance America's core national security interests. When the President forces this conflict to a successful end, gas prices will drop back to multi-year lows and global energy markets will be much more stable in the long term."

Even if there are few signs that Americans are driving less, there's mounting evidence that they're changing other behaviors due to high gas prices.

Corporate earnings calls show consumers are trying to find the cheapest gas possible and filling up less. Some say they're holding off on buying big-ticket appliances, even as Memorial Day sales approach. Polling and sentiment gauges show that high gas prices are exacerbating worries about the cost of living.

And consumer sentiment touched an all-time low on Friday, according to University of Michigan researchers.

Now read: Buckle up for $120 oil changes. Why car care is about to get more expensive.

Still, the stock market SPX is sharply higher. And that's another clue to the test ahead: Wealthier consumers may not crack thanks to what's happening in their stock portfolios.

People who own a home and have a stock portfolio and other financial assets have benefited from the bull market and continue to spend, said Michael Hans, chief investment officer at Citizens Wealth.

"At the lower end, there is more strain," Hans said. Yet looking ahead, the two linchpins will be how long energy and gas prices stay high and whether the economy can maintain a low unemployment rate.

Kloza at Gulf Oil said he's been "flabbergasted" by the stock market's continuing bull run under the circumstances. "The 'wealth effect' of a 50K Dow DJIA and record numbers for other indices takes some of the sting out of high energy prices," he said. But that won't help lower-income households with little stock-market exposure, he added.

For all the focus on gasoline prices, drivers, businesses and investors may also need to keep a close eye on diesel this summer. The fuel powers the tractor-trailers and many of the freight trains that haul the goods and foods that end up on store shelves.

High diesel prices are one way high inflation could spread from the gas pump to other parts of the economy. Diesel is now within 20 cents of its record of $5.81 per gallon.

"Most of all, I believe we have a 'wolf at the door' scenario with diesel," Kloza said. "It is hard to conceive of a scenario where diesel prices aren't sky-high and aren't impacting inflation across the U.S."

See also: People who make less than $40,000 a year are hurt the most by the recent increase in gas prices, says the Fed

Joy Wiltermuth contributed.

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-Andrew Keshner -Myra P. Saefong

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05-22-26 1426ET