CAMARILLO, Calif. -- The Oct. 18 average retail price of regular-grade gasoline, $3.3628, was 2.01 cents per gallon lower than it was two weeks earlier, according to the most recent Lundberg Survey of approximately 2,500 U.S. gas stations. It was 22.19 cents lower than it was six weeks ago. Most of the decline took place between Sept. 20 and Oct. 4.
The price was the lowest since late January this year, and is at a discount of 39.01 cents per gallon under its year-ago point.
The downward price spiral at the pump may now be ending, if it has not already. Lower crude oil prices have been passed through by refiners, and lower wholesale gasoline prices have been passed through at retail as well. Also passed through by refiners into wholesale gasoline are lower RINs prices on gallons that required a purchase of regulatory compliance by for the federal renewable fuels sales mandate.
Retailer margin on gasoline is approximately normal, but refiner margin on gasoline is squeezed. It would probably take another wave of crude oil price cuts for refiners to be able to continue slashing wholesale gasoline prices to their accounts. The U.S. light grade benchmark oil WTI did slip again in the past two weeks but the main European light grade benchmark, Brent, gained.
Refiner gasoline margin recovery was meager and margin remains historically tight. U.S. average retailer margin on gasoline narrowed slightly but remains better than it has during year-to-date 2013. There are some prickly retail margin pains in some of the Gulf, Southwest, and Southeast markets, while several Western and Midwestern markets' margins are attractive--for now.
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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