One out of every 10 households now spends at least 10% of its income on gasoline as the Iran war pushes up fuel prices.

More Households Struggle as Gas Prices Soar, Impacting Daily Budgets

Take a Number: A Striking Figure In Economic News Today

Diccon Hyatt

Full Bio Diccon Hyatt is an experienced financial and economics reporter. He's written hundreds of articles breaking down complex financial topics in plain language, emphasizing the impact that economic currents would have on individuals' finances and the market. He has a Bachelor's degree in English from the University of Delaware.

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Published April 28, 2026

04:43 PM EDT

A bar graph with an upward arrow and a 10 label

Investopedia / Elizabeth Guevara

Key Takeaways

Gasoline prices are squeezing the budgets of people with lower incomes.
The Iran war has driven up oil prices, pushing up gas prices by more than $1 a gallon since March.
U.S. consumers used their tax refunds to cover higher costs, but the gas crunch may force spending cutbacks as early as May, according to one analysis.

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Call them the ten-percenters: as of March, just over 10% of U.S. households were spending 10% or more of their incomes on gasoline.

That's according to the Bank of America Institute, which studied the bank's own deposit data to see how much customers were spending to pay for gasoline that's shot up in price since the Iran war began Feb. 28.1 The share of households devoting 10% or more of their budgets to gas was up from 8% the same month in 2025, and was the most since 2022, when nearly 15% of households were in that position.

The data underscore the serious impact of the Iran war on household budgets, especially for those with less wiggle room to absorb higher pump prices. With the crucial Strait of Hormuz still closed to shipping because of the war, crude oil prices have continued to rise and gas prices along with them.

As of Tuesday, a gallon of regular gasoline averaged $4.18 a gallon, up from $2.98 before the war, according to AAA.2 The energy crunch has strained finances and threatens to push prices of other products as higher transportation costs get passed down the supply chain.

What This Means For The Economy

Higher gasoline prices threaten the ability of American consumers to keep spending, especially those with lower incomes, who will have to cut their budgets somewhere to afford pricier fuel.

"Higher gasoline prices are stretching household budgets, with the greatest impact on lower-income consumers," BofA Institute researchers led by Senior Economist David Michael Tinsley wrote.

Better-off households are still feeling the financial pinch, albeit not as severely. A median-earning family with two vehicles is shelling out an extra $70 a month for gas, equivalent to 1% of their income, according to an analysis this week by the Brookings Institution think tank.3

With so much extra cash now going toward gasoline, economists are wondering whether and when consumers will start cutting back on other purchases. That would be bad news for the health of the economy, since 68% of GDP comes from consumer spending.4

So far, there's little evidence of that happening: the onset of the Iran war coincided with tax season, and many households have used their refunds to offset the higher prices, economists at Pantheon Macroeconomics said in a commentary this week. But with tax season over, that could soon change.

"It’s likely that consumers will continue broadly to maintain their discretionary spending into April, despite still-elevated gas prices," they wrote. "But this support will fade rapidly in May, as the normal filing deadline passed on April 15."

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