Gas, diesel and the $8 billion farm aid: the Iran war hits wallets

Gas is about $4.30 a gallon, diesel hit a record in September, and inflation rose to 3.7%. The White House answered with an $8 billion payment to farmers and sanctions waivers on Russian diesel.

The numbers

• Gasoline: AAA's national average was about $4.30 a gallon on October 24, down from about $4.41 at the start of October. September set a record monthly average of $4.33.

• Diesel: a record $6.53 a gallon in late September, compared with $3.26 a year earlier (AAA).

• Oil: Brent crude was back above $110 a barrel this week as Iran kept the Strait of Hormuz closed.

• Inflation: 3.7% in September, with energy prices up 20.4% from a year earlier.

What the government is doing

• On October 19, at a rally in Park City, Kansas, President Trump announced an $8 billion "Harvest Fuel Relief" program: one-time payments to farmers, run by USDA's Farm Service Agency, to offset diesel costs at harvest. It follows a $12 billion farm aid package last December. Agriculture Secretary Brooke Rollins said it would "help bring certainty to our farmers during this harvest."

• Earlier in October, Trump lifted sanctions on Russian diesel exports to bring down U.S. fuel prices; Ukraine's president called that a "reward" for Putin.

• The Farm Bureau says fuel costs added about $6 per acre to growing wheat and $52 per acre for rice.

The case for the relief

Supporters say farmers face a price shock they didn't cause, that harvest can't wait for Congress, and that keeping farms solvent protects the food supply. They argue easing sanctions on Russian diesel is a practical way to lower prices at home.

The case against

Critics say repeated aid packages, announced at campaign rallies before an election, are political spending without a vote in Congress, and that they treat the symptom while the war that is driving fuel prices continues. Others object to easing sanctions on Russia during its war on Ukraine.

What to watch

Whether Hormuz reopens, how quickly Harvest Fuel Relief payments reach farmers, the October inflation report in November, and heating-oil and propane prices as winter starts.