Retail Margin Shrinkage Is Ending Pump Price Drop

Near term price will stabilize, says Lundberg

Vintage Gas Station

CAMARILLO, Calif. -- The U.S. average retail price of regular grade gasoline shed another 1.69 cents per gallon in the past two weeks, after declining 3.46 cents in the prior two-week period, according to the most recent Lundberg Survey of approximately 2,500 U.S. gas stations. Total drop in a month: 5.15 cents.

The current price is nearly 30 cents below its year-ago point.

The retail price cutting, however, is likely coming to a close. Near term, the price will probably stabilize, or rise by a few pennies. This is because in the past few days, wholesale price hikes have been hitting retailers, who have not yet passed through these hikes to motorists.

The largest wholesale rises have been in the West; however, they are cropping up in most of the country now.

The February margin on regular is 11.35 cents per gallon, down from a healthier 14.75 cents two weeks earlier.

It would take sizable drops in various key crude oils to allow retail gasoline prices to continue dropping. Price stability or modest hikes on the street over coming days are indicated by skimpy retail margin.

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.