Retail Margin Still Narrow
Small national price change masks giant local ones, says Lundberg
CAMARILLO, Calif. -- The U.S. average retail price of regular-grade gasoline fell 1.81 cents per gallon in the past three weeks, to $3.6385 per gallon, according to the most recent Lundberg Survey (www.lundbergsurvey.com) of approximately 2,500 U.S. gas stations. Behind that average, however, there were big swings both up and down around the country.
Pump prices were generally up in the Midwest and Rockies, and down in the West and Gulf, while PADD 1 retail prices changed little overall.
Even within regions there was great variety--for example, Chicago's hike of nearly 24 cents over three weeks and St. Louis's drop of more than 23 cents. It is some refiners having completed maintenance and repair projects and others still completing them that supported this mix.
Neither U.S. nor European main benchmark crude oil prices changed significantly during the three-week period.
Gasoline supply is more than adequate for lackluster demand, and the current retail price sits 1.4 cents above its year-ago level.
Meanwhile the comparatively low retail margin stands out as a likely factor in future prices at the pump. Although the U.S. margin on regular grade expanded by nearly two cents over the period, it is still less than 11 cents per gallon, in contrast to the 14-to-18-cent margin commonly achieved earlier this spring.
The pressure on retailers to grow gasoline margin remains. If crude oil prices stay calm, retail price may rise slightly soon to reflect 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.