CAMARILLO, Calif. — The U.S. average retail price of regular grade gasoline surged 25.06 cents per gallon (CPG) in the past three weeks, according to the most recent Lundberg Survey of U.S. fuel markets. It is up 71.51 cents since Nov. 20, 16 weeks ago.
The current price sits heavily 50.75 CPG above its year ago point.
Again the chief driver is higher crude oil prices, themselves driven in part by the OPEC+ production cut rollover and hotter degree of Middle East oil supply risk premium.
The U.S. gasoline market has been more agitated than crude, as last month's extreme cold storm and catastrophic power outages idled much refining capacity, which slashed gasoline output. Also in gasoline's column, the extreme spike in renewable identification numbers (RINs) prices affecting refiners' gasoline pricing is hitting the street as well.
The refining sector is getting beat up by two raw resource weapons: oil acquisition prices and sales credits for the government-forced non-petroleum resource, ethanol, which by law must be blended into its gasoline. The federal ethanol sales mandate remains unadjusted for last year's bludgeoning of gasoline demand, translating to a ludicrously high bar for refiners to jump over. Both crude and RIN costs are destined to reside in street-level gasoline prices, and that is where they have landed.
On a national and weighted basis, wholesale gasoline price increases passed through from crude oil by refiners were almost entirely passed through by retailers to consumers. The pressure was certainly on: The U.S. average retail margin on regular grade was a meager 15.66 CPG on Feb. 19, and now it is 0.26 cents worse.
The March 13 start of Daylight Saving Time and start of the spring demand increases are up-influences upon gasoline price, as is next month's rollout of summer blend specs in most of the nation that adds a tad to cost; however, they are rendered meek in the face of the twin batterers, oil and RINs. Short term, any further gasoline price increases will probably be far smaller than just seen.
- 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.