CAMARILLO, Calif. -- After nine weeks of retail gasoline price cuts, the U.S. average price is up 3.41 cents in the past two weeks, according to the most recent Lundberg Survey of approximately 2,500 U.S. gas stations.
The average retail price began dropping on Sept. 6, then plummeted nearly 37 cents through Nov. 8.
U.S. refiner margin on gasoline had been crimped for months. In these two weeks, although West Texas Intermediate's price was a virtual no-change, the price of Brent and some other crudes shot up. U.S. refiners finally had to cry "uncle" and hike wholesale gasoline prices generally across the country. There remains more pressure on refiners to recover margin further.
Retailer margin on gasoline, meanwhile, had been healthy, sometimes fabulous, for months. But now with wholesale price hikes hitting, many retail margins are in stark territory. On regular grade, the U.S. average retail margin is a naked nickel in the Nov. 22 snapshot; even pooled, including all three grades, it is barely 6 cents. In nearly one-fifth of markets, mostly Gulf Coast and Southeast locations, margin on regular was negative on Nov. 22, while it was still attractively high in many Western markets.
In PADD 3, the Gulf, unbranded rack leaped more than 30 cents per gallon since Nov. 8, with branded up nearly as much. Unbranded in the Gulf now averages 264.93 cents, 6.38 cents above the Midwest average.
PADD 2 had unbranded hikes of 17 cents over two weeks, most of it prior to Nov. 15. PADD 1, the East Coast, saw similar action, driven by Southeast rack price hikes.
In PADD 5, the West, unbranded is up just 8 cents, with more than half of that just on one day, Nov. 22, while rises in the branded rack channel have been miniscule so far.
These price hikes at the racks, and soon in the direct-delivered dealer channel, as well, will be passed through in a hurry if retailers are to avoid capsize. Even if crude oil prices don't show new strength in the next several days, another dime at the pump on average is most likely on its way.
Camarillo, Calif.-based Lundberg Survey Inc. is an independent market research company specializing in the U.S. petroleum marketing and related industries.
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