Retail Gasoline Price Turnaround
Price still a consumer bargain, says Lundberg
CAMARILLO, Calif. -- The July 27 U.S. average retail price of regular grade gasoline is up 9.55 cents per gallon since July 13, after crashing 56 cents during the prior 14 weeks, according to the most recent Lundberg Survey of approximately 2,500 U.S. gas stations. The current price of $3.5058 remains 46 cents under its peak back on April 6. More good news for motorists, this price is discounted 20 cents per gallon under the year-ago level. These price comforts for consumers are favorable for demand.
Meanwhile, retail margin recovered. During the first half of July, higher crude oil prices hit wholesale, slashing margin. Now in the second half of July wholesalers have achieved passthrough of their price hikes. So oil price hikes are already manifested on the street. If crude does not jump dramatically from here, then retail prices might have a period of comparative stability.
Two weeks ago, when the average wholesale prices (weighted by class of trade, branded rack, unbranded racks, and DTW) jumped 13.35 cents, the retail price continued down so retail margin shrank to just 8.8 cents nationally. By July 27, wholesale price hikes had slowed while retail climbed nearly a dime, allowing margin some needed recovery to a U.S. average 12.6 cents.
While margin is sorrowfully below what it was during the second quarter of the year, it is far better than its dismal February levels.
Year to date, retail margin on regular grade is 14.33 cents per gallon, off just 0.27 cents from full calendar year 2011 and notably better than during the prior two years.
Camarillo, Calif.-based Lundberg Survey Inc. is an independent market research company specializing in the U.S. petroleum marketing and related industries.
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