CAMARILLO, Calif. -- The national average retail price of regular-grade gasoline slipped 5.05 cents per gallon (CPG) over the past three weeks, even though crude-oil prices rose slightly, according to the most recent Lundberg Survey of approximately 2,500 U.S. gas stations. Refiners passed their oil buying prices through and then some, thereby recovering a little gasoline margin. Retailers, however, lost big.
On a volume-weighted basis, the average wholesale price of gasoline rose 5.09 CPG on regular grade, but the retail price dropped anyway. So retail margin was slashed.
Retailers are facing headwinds in passing through their wholesale price hikes, but with average margin at a mere 13.12 CPG on Feb. 10, they will need to regain ground soon. Demand climbed out of its perennial January trough, made worse than usual by severe weather, but in early February it remains in the winter doldrums. This is occurring during robust refinery output of gasoline. On top of that, the current retail price is 49.13 cents above its year-ago point, further dampening motorist demand.
Look at Cleveland: On Jan. 20, average margin on regular was plump, above 27 cents. Then the average wholesale price gained nearly 6 cents, while retail prices continued to decline from their early January level. Retail crashed 15.17 CPG, plunging margin to a mere penny on Feb. 10.
Unless crude-oil prices should retreat quickly, U.S. retail prices will likely gain a few cents in coming days, due to needed retail margin recovery.
Camarillo, Calif.-based Lundberg Survey Inc. is an independent market research company specializing in the U.S. petroleum marketing and related industries. Click here for previous Lundberg Survey reports in CSP Daily News.
Trilby Lundberg is publisher of the Lundberg Survey, Camarillo, Calif.