CAMARILLO, Calif. — Between March 8 and March 22, the national average retail price of regular-grade gasoline jumped 16.07 cents per gallon (CPG), according to the most recent Lundberg Survey of U.S. fuel markets. The rise is now 10 weeks long, totaling 35.31 cents.
The current price is the same as it was one year ago. The discount motorists were receiving is now kaput. Actually, it is now a minuscule penalty: The March 22 pump price is twenty-one hundredths of a penny above its year-ago point. That sounds like stability. However, spring 2019 has seen a price increase totaling 35.31 cents over just 10 weeks.
And it seems not to be finished. While the first several weeks of the price increase were thanks to crude oil prices, now the gasoline price is following its own counsel. While West Texas Intermediate's new month futures price gained in these two weeks, that increase accounts for less than half of retail gasoline's price jump. Spring reformulations that make gasoline more costly to produce and the idling of some refining capacity for annual work projects in advance of the big summer demand pull accounted for the bulk of it, and they are still active factors.
Also, some unplanned refining facility idling has added to the workload. The result: Gasoline is costlier to make and there is less of it.
Probably there are still a few more pennies coming to the retail price.
But what does seem to be finished, if there are to be sufficient open stations in the country, is retailers' gasoline margin shrinkage. While refiners got well, as their gasoline margin swelled into healthy territory, retailers have not caught a break. Shrinkage has been occurring since Jan. 25, to the sad tune of 13.93 cents during two months. Regular-grade margin has just lost another 0.55 CPG, putting margin at 10.12 CPG on March 22.
Margin recovery for gasoline retailers has become urgent. This, too, indicates that retail gasoline prices, absent an important downward correction in oil prices, will continue to rise.
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Trilby Lundberg is publisher of the Lundberg Survey of U.S. fuel markets. Camarillo, Calif.-based Lundberg Survey Inc. is an independent market research company specializing in the U.S. petroleum marketing and related industries.