Equipment fuel cost: 5 gasoline price figures to carry

Key takeaways

• Check whether your starting price includes taxes before adding them.
• Use the grade the manufacturer requires.
• Keep dates beside national averages and replace them with local prices.
• Use equipment data or fuel logs for the hourly burn rate.

If you price gasoline-powered equipment by the hour, fuel is one of the lines that moves under you. The pump price changes with crude oil, state taxes and fees, and the grade you choose.

This post gives you five gasoline price figures to carry in your fuel line. Each one comes from a published source, so you can see where it came from and how far it can move. We also look at federal contracting rules that matter when a fuel cost changes after you have signed. Where a number comes from a source, the post links the page. Where the advice is general, it says so.

One caution before you start. Every figure below is a national figure, a rate, or a dated value. Your local pump price, your state, and your delivery terms will differ. Use these figures as building blocks, and replace them with your own supplier invoices and local prices when you have them.

Why the pump price is only the start

That habit causes trouble. A gasoline price is built from parts that move at different speeds, and each part has its own source. If you know the parts, you can tell a real market change from a grade choice, and you can tell a tax that was already in the price from a cost you still need to add.

A practical point follows from this. A fuel line is easier to defend when it shows its inputs. A single number with no source invites argument. A line that shows the base price, the tax share, the grade, and the burn rate lets a reviewer see which input changed, and it lets you update one input without rebuilding the whole estimate.

The U.S. Energy Information Administration (EIA) explains those parts in its explainer on factors affecting gasoline prices. The biggest piece is crude oil. In the EIA's words, "The largest component of the retail price of gasoline is the cost of crude oil, and its share of the retail gasoline price varies over time and across regions of the country." That is the part you cannot control, and it is the main reason a fuel price you carry today can be stale next quarter.

The five figures below cover the parts you can pin down: two tax figures, two grade premiums, and one older grade gap that shows how much the picture has changed. Each figure has a date or a scope attached. Keep that label with the number when you copy it into your sheet.

Figure 1: The federal tax is 18.40 cents a gallon

The first figure is the federal tax on gasoline. The EIA puts it at 18.40 cents a gallon, including an excise tax of 18.30 cents and the federal Leaking Underground Storage Tank fee of 0.1 cents a gallon. The same EIA page is the source for this figure.

This is a set amount for each gallon at the federal level. It does not depend on which state the machine runs in, and it does not depend on the grade you buy. That makes it the easiest tax line to carry. Show it as its own row in your fuel sheet, so a reader can see how much of a delivered price is federal tax.

Do not treat the 18.40 cents as the whole tax burden. It is only the federal share. The next figure covers the state side, and the two together give a more complete picture of what sits inside a gallon.

Figure 2: State taxes and fees average 33.55 cents a gallon

The second figure covers state taxes and fees. According to the EIA, state taxes and fees on gasoline averaged 33.55 cents a gallon as of January 2026.

Two things matter here. First, this is an average across states, so it is a starting point and not your state's rate. A machine working in a state with higher charges may carry a larger tax share than the average, and a machine in a lower-charge state may carry less. Second, the figure is dated January 2026. Taxes and fees can change, so keep the date next to the number.

For a local estimate, look up the current tax and fee for the state where the equipment operates. Use that figure in your fuel line, and keep the national average as a reference point. The gap between the two tells you whether your region is pulling your fuel cost up or down compared with the typical state.

Figure 3: Midgrade costs about 57 cents more than regular

The third figure is the midgrade premium. The EIA reports that in 2025, the national annual average price of midgrade gasoline was about 57 cents a gallon more than regular-grade gasoline. That comparison is on the EIA factors page.

Read the scope carefully. This is a national annual average for 2025. It tells you what a step up in grade cost on average that year. It does not tell you what your local station charges today, and it is not a forecast. Treat it as a benchmark you can compare against your own local prices.

For equipment, the grade question is usually settled by the owner's manual or the manufacturer's instructions. If the manual calls for one grade and allows no alternative, the midgrade premium is not a choice. If the manual allows more than one grade, the premium becomes a real option you can price and decide on. Check the requirement before you assume either way.

Figure 4: Premium costs about 93 cents more than regular

The fourth figure is the premium grade. The same EIA page reports that the 2025 national annual average for premium-grade gasoline was about 93 cents a gallon more than regular-grade gasoline. The page also explains why: "Refiners charge more for higher-octane fuel, and premium-grade gasoline is the most expensive."

Because the premium is charged for each gallon, its effect on an hour of work depends on how much fuel the machine burns. Multiply the price gap for a gallon by gallons burned each hour:

• At one gallon each hour, the premium adds 93 cents to that hour.
• At any burn rate, the hourly premium is the gallon price gap times the gallons the machine burns in that hour.

Your hourly fuel burn is the input you need from the manufacturer's data or from your own fuel logs. Do not guess it. A machine that burns more fuel each hour makes the grade choice cost more each shift, even when the gallon price gap stays the same.

As with the midgrade figure, the premium gap is optional only if the manual allows a lower grade; required premium remains a cost to carry. Do not carry premium by default just because it seems safer. Carry the grade the manufacturer specifies, and show the premium as a separate line only when a real choice exists.

Figure 5: The grade gap used to be about 10 cents

The fifth figure is a historical reference. The EIA says that from 1995 through 2006, the price difference among grades of gasoline was typically about 10 cents a gallon. The source is the same EIA page.

Set this figure next to figures 3 and 4. Against a typical gap of about 10 cents from 1995 through 2006, the grade differences have grown a great deal. If an estimator still carries a grade difference from memory or from an old sheet, that number may be low compared with the 2025 averages.

Keep the historical figure only as context. Do not use it as a current price. Its job is to remind you that grade gaps are not fixed, and that a fuel line built years ago needs a fresh look.

Building the fuel line from the five figures

Once you have the five figures, the fuel line itself is simple arithmetic. The formula looks like this:

• Price of a gallon: the base price for the grade you will buy, from your supplier or a local price source.
• Gallons each hour: the fuel burn for the specific machine, from the manufacturer or your logs.
• Hourly fuel cost: price of a gallon multiplied by gallons burned each hour.

The five figures help you check the price of a gallon. Before you add taxes, confirm whether your base price already includes them. If your starting number is a retail or delivered price, check its tax treatment before adding anything. If your starting number is a pre-tax supplier quote, add the applicable taxes on top. Write down which case applies, so the next person reading the sheet does not have to guess. For a related review, use the fuel line guide.

Crude oil's share of the retail gasoline price varies over time and across regions. A fuel line should include a review point. Choose a price band that fits your own risk tolerance, and check the local price when the market moves past it. Record the date of each check.

Hourly effects of the figures

Here is the arithmetic with the burn rate left as a variable, so you can put in your own number. The burn rate is an assumption you must replace with the figure from your equipment data.

For any machine, the hourly effect of each figure is its gallon value multiplied by gallons burned each hour:

• Federal tax: 18.40 cents a gallon times gallons burned each hour gives the hourly federal share.
• State taxes and fees: 33.55 cents a gallon times gallons burned each hour gives the hourly state share, at the January 2026 average.
• Midgrade over regular: 57 cents a gallon times gallons burned each hour gives the hourly midgrade premium, at the 2025 average.
• Premium over regular: 93 cents a gallon times gallons burned each hour gives the hourly premium, at the 2025 average.

Two lessons come out of this. First, the two tax figures apply to every gallon, so a machine that burns more fuel carries more tax each hour. If the taxes are not already inside your base price, add them once, at the burn rate for that machine. Second, the grade choice can outweigh the taxes. The midgrade gap of 57 cents a gallon is larger than the federal tax alone, and the premium gap of 93 cents is larger than either tax figure on its own. A reviewer who asks why a grade line is in the estimate should find the answer in the sheet, not in someone's memory.

Illustrative example: Calculate an hourly fuel cost

Assume an illustrative tax-inclusive price of 5 dollars a gallon and an illustrative burn rate of 2 gallons each hour. Multiply 5 by 2: the illustrative hourly fuel cost is 10 dollars. Do not add taxes again.

When the fuel cost changes after you sign

Some contracts include a way to adjust prices when costs change. The federal contracting rule that governs these adjustments is set out in FAR 16.203-1. It says, "These price adjustments are based on increases or decreases in specified costs of labor or material that the contractor actually experiences during contract performance." A second sentence in the same section adds, "These price adjustments are based on increases or decreases in labor or material cost standards or indexes that are specifically identified in the contract."

Read those two sentences together. The adjustment follows costs the contract names, either as costs the contractor actually pays or as standards or indexes the contract identifies. That means the clause decides what counts. If fuel is not named or indexed in your contract, a fuel increase may not be covered by any adjustment. Do not assume it is. Check the clause text. The escalation clause guide offers a related contract review.

The standard economic price adjustment clause for supplies is FAR 52.216-2. It sets a limit on how far prices can rise under that clause: "The aggregate of the increases in any contract unit price under this clause shall not exceed 10 percent of the original contract unit price."

Put that cap into a worst-case check. Compare that ceiling against the fuel increase you are worried about. If the ceiling is lower than the risk, you need to carry the rest of the exposure in your own price or in your contingency.

This section is general guidance, not legal advice. The clause numbers and terms are the ones in your contract. Ask your contracts team which clause applies before you rely on any adjustment.

Common mistakes to avoid

Five mistakes are worth naming, because each one is easy to make when a fuel line is copied from an older bid.

• Adding taxes to a price that already includes them. This is the most direct double count. The fix is to label the base price as either retail or pre-tax.
• Carrying a 2025 average as if it were today's price. The national annual averages are a benchmark. Your local station and your supplier set the number you actually pay.
• Treating a required grade as optional. If the manufacturer specifies a grade, the premium or midgrade line is not a choice, and a cheaper grade is not a saving you can book.
• Using the national state-tax average for every state. The average is a useful reference, but a local estimate should use the state where the equipment works.
• Assuming the contract covers fuel. An adjustment clause only covers the costs it names or indexes. Read the clause before you count on it.

A short checklist for the fuel line

Use this list when you review a fuel line before it goes into a bid or a budget:

• Record the gallon price, the grade, the source, and the date.
• Confirm whether the base price already includes federal and state taxes.
• Carry the federal tax figure of 18.40 cents a gallon as its own row, with the EIA link and the scope noted.
• Carry the state tax and fee figure, and replace the national average with your state's current figure when you have it.
• Set the grade from the manufacturer's requirement. Show a premium or midgrade line only when a real choice exists.
• Enter hourly fuel burn for each machine, from the manufacturer or your own logs.
• Calculate hourly fuel cost as gallon price times gallons burned each hour.
• Mark the grade gap figures as 2025 averages, and do not reuse the 1995 to 2006 gap as a current price.
• Check your contract for an economic price adjustment clause, and note whether fuel is named or indexed.
• If the contract uses the supplies clause in FAR 52.216-2, note the 10 percent cap on total increases.
• Set a review date, and re-check local prices when the market moves past your chosen band.

Closing thoughts

A fuel line does not need to be perfect. It needs to be traceable. When a number is wrong, you should be able to see which part of the price caused it: crude oil, a tax, a grade choice, or a contract clause that did not cover the change. The five figures in this post give you a starting structure. Tie each one to its source, keep its date, and replace it with local data as soon as you have it. Review the line again whenever the local price, the tax picture, or the contract changes, and note the date of that review in the sheet so the next reader knows how current the numbers are.

Today, check one machine's required grade and fuel log, then update its hourly fuel cost using a dated local price.

Common questions

Should I add taxes to a pump price?

Check whether taxes are already included before adding them. Label the price's tax treatment in your sheet.

Can I use a cheaper grade to lower the estimate?

Use a lower grade only when the manufacturer's instructions allow it. A required higher grade remains a cost to carry.