ST. PETERSBURG, Fla. -- Fuel retailers saw gasoline and diesel margins shrink by double-digit percentages year over year this spring, according to a new Raymond James report.
The national average margin on regular unleaded gasoline fell to 16 cents per gallon (CPG) for the month of April 2018, a 16-month low, according to the latest Convenience Store Grab-N-Go research note from the St. Petersburg, Fla.-based investment firm. This is about 4% lower than the five-year average for the month, and off 19% on a year-over-year basis.
The Southeast and Midwest both saw margins fall 27% below year-ago levels, while in Texas margins plummeted 32%. The Northeast faired the best, with margins off just 2% year over year.
The national average diesel retail margin fell 17% year over year to hit its lowest April level in seven years.
Quickly rising crude prices and an accompanying 20-CPG jump in wholesale fuel prices pressured retail margins. April is historically one of the three weakest months for retail margins; they tend to rise 20% to 40% in May and June thanks to higher demand and the completed shift to more costly summer blends, according to Raymond James.
However, May’s retail margins have also suffered under a nearly 10-CPG increase in wholesale prices over the past three weeks. This has put May retail margins about 20% below year-ago levels, Raymond James said, although a recent easing in wholesale prices may halt any further erosion for the month.
Photo courtesy of NithidPhoto.
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