Retail Margin Crushed Again

Price cuts at the pump can't last, says Lundberg

gas station

CAMARILLO, Calif. -- In the past two weeks, the U.S. average retail price of regular grade gasoline dropped 1.72 cents, to $3.2618 per gallon, according to the most recent Lundberg Survey of approximately 2,500 U.S. gas stations. This follows a month of modest price hikes totaling 6.14 cents between Nov. 8 and Dec. 6.

The current pump price is virtually the same as it was one year ago. It sits four tenths of a cent above the Dec. 21, 2012, price.

While retail prices were edging down between Dec. 6 and Dec. 20, wholesale prices were moving up. On a weighted average basis, the nation's jobbers and retailers are now paying more than three cents per gallon above what they were two weeks ago. Rack jumps have been occurring in all regions. Heftiest was the unbranded jump in PADD 5: 18.42 cents per gallon since Dec. 13, hitting 272.06 cents per gallon on Dec. 20. Nationally, unbranded and branded racks surged 14.62 cents and 9.39 cents respectively, since Dec. 13.

Result: The U.S. average margin on regular was slashed by a nickel and is now less than a dime.

Probably, unless crude oil steps in with heavy price slippage, the modest retail cut just seen will be the last for a while. Instead, assuming some margin recovery, the average retail price will probably gain a few cents before the New Year.

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.