By Brian L. Milne, Refined Fuels Editor, Telvent DTN
Based on a report delivered by the Energy Information Administration to a Senate Committee in late March, more than a dozen states have at least one community in which retail gasoline prices have topped $4 gallon.
All of California, Alaska and Hawaii are paying more than $4 for each gallon of the transportation fuel, with the pump price above $4.20 gallon for many of these locales. Consumers in most of the communities in the Pacific Northwest are finding gasoline at their local outlet at or above $4 gallon. Illinois and New York are two states in which the $4 gallon pump price is broadly found, with a smaller number of locales in Nevada, Minnesota, Indiana and Connecticut seeing the $4 price tag.
In February, the national average price of regular grade gasoline averaged $3.58 gallon, 37 cents or 11.5% higher than February 2011, and an historic high for any February. Diesel fuel prices have moved higher along a parallel path, averaging $3.95 gallon in February, 37 cents gallon or 10.3% higher than 2011.
View Telvent DTN’s Weekly and Historical Fuel Price Index.
The key factor driving gasoline and diesel retail prices are the cost of crude oil inputs to refiners, explained Howard Gruenspecht, acting administrator of the EIA, in his report to the Senate Committee on Energy and Natural Resources on March 29.
EIA projects the average refiners’ acquisition cost of crude oil to increase from $102 barrel in 2011 to almost $115 in 2012, before falling back to $110 in 2013.
“Given its forecast for crude oil prices, EIA is expecting an increase in gasoline and diesel prices in 2012 of almost 30cts gallon over the 2011 average price. EIA expects gasoline retail prices to average $3.79 for regular-grade this year compared with $3.53 last year.
During the April-through-September peak summer driving season this year, prices are forecast to average about $3.92 gallon, peaking at $3.96 gallon in May.
Diesel prices are projected to average $4.15 gallon in 2012, 31cts higher than in 2011. Prices decline to $4.11 in 2013.
The increases in crude oil prices since the start of 2011 appear to be related to a “tightening world supply-demand balance and concerns over geopolitical issues that have impacted, or have the potential to impact, supply flows from the Middle East and North Africa,” Gruenspecht said.
About the Author
Brian L. Milne is the Refined Fuels Editor for Telvent DTN—a leading business-to-business provider of real-time commodity information services. Milne has been focused on the energy industry for 16 years as an analyst, journalist and editor. He can be reached at [email protected]