CAMARILLO, Calif. — The national average retail price of regular grade gasoline is a virtual no-change from two weeks ago. The $3.4930 price is 0.19 cents per gallon (CPG) above the Nov. 5 price, according to the most recent Lundberg Survey of U.S. fuel markets.
Behind that average, as always, are up and down moves around the nation, but this time it is dramatic, with numerous retail price cuts, some of them quite tiny, in many cities. But that was outside the West; in California, for example, the average price zoomed up 8 CPG to a stunning $4.67 per gallon
Even more notable though is that behind retail’s no-change, there were two big opposing moves: Crude oil prices retreated over the two-week period, while ethanol prices shot skyward. Consumers aren’t seeing the oil price cut at the pump, in part because surging ethanol prices are baked into the pump price.
For U.S. refiners, currently adding insult to injury is that they must, by law, buy ethanol (or government credits for volumes not bought), which displaces products refiners are in the business of making and supplying, and they must do so at extremely high prices. The corn-derived product is writhing under logistics troubles, which include a shortage of truck drivers, seriously hampering access to supply.
Refiners padded their gasoline margins some with the lower oil buying prices. And the wildly higher ethanol prices reside in gasoline rack prices destined for retail.
Retailers, meanwhile, failed on average to pass through higher wholesale prices, thereby slicing a penny of the U.S. retail margin.
The fact that the national average retail gasoline price did not change would appear to bode well for motorists. And from here there may be at least some pump price relief; however, if crude oil prices retrace their steps and the ethanol supply chain troubles persist, then it’s back to price-battering on the street.
- Click here for previous Lundberg Survey reports in CSP Daily News.
Trilby Lundberg is publisher of the Lundberg Survey of U.S. fuel markets. Lundberg Survey Inc. is based in Camarillo, Calif.