How Are Rising Gas Prices Affecting Tax Refunds In The U.S.

Rising U.S. gas prices linked to the Iran conflict could offset the benefits of larger tax refunds this year, according to an analysis by the Stanford Institute for Economic Policy Research. The report said the average household may spend an additional $740 on fuel due to higher global oil prices.

According to the nonpartisan Tax Foundation, tax refunds are expected to increase by about $748 this year under President Donald Trump’s tax cuts. IRS data shows average refunds have reached $3,676, up 11% from last year.

Higher energy prices might eat your tax refund, economists say https://t.co/xaYZO3sJaL #axiosmacro

— Joe Trippi (@JoeTrippi) March 18, 2026

However, economists warned that higher energy costs could cancel out these gains. The analysis assumes the Strait of Hormuz remains disrupted for several weeks, pushing oil prices higher.

Fuel prices have already surged, with Brent crude nearing $111 per barrel and U.S. gas averaging $3.88 per gallon, according to AAA data. Researchers noted that while prices rise quickly, they often fall slowly, prolonging the financial strain on households.

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tippinsightsTIPP Staff