US energy department warns gas prices are unlikely to recede to prewar levels until mid-2027 at the earliest

Source: Financial Times

The US energy department has warned petrol and diesel prices are unlikely to recede to prewar levels until mid-2027 at the earliest, ratcheting up costs for industries from trucking and farming to airlines and retailers.

Official figures released on Tuesday show US petrol prices rose 19 per cent over the past two weeks to $3.50 a gallon as the Middle East conflict throttled energy supplies, while diesel jumped 28 per cent to $4.86 a gallon.

Petrol is not forecast to drop back below its $2.94 per gallon pre-conflict level before the end of 2027, according to the Energy Information Administration, the energy department’s statistics arm. Diesel — the lifeblood of American industry — will not fall below the $3.81 per gallon it sat at two weeks ago until the middle of next year.

The shift threatens to push up costs for industry, which in turn will ratchet up prices for consumers with far-reaching inflationary impacts.

It will also pile pressure on President Trump, who campaigned for the presidency in 2024 on a platform to slash petrol and energy costs. Prices at the pump are now higher than at any time during his two terms in office.