Regular-grade gasoline retail prices averaged $3.53 per gallon in 2011, $0.74 per gallon (27 percent) higher than the 2010 average, the Energy Information Administration (EIA) reported in its Short-Term Energy Outlook, published May 8.
The price increase in 2011 largely reflected higher crude oil costs ($0.60 per gallon) and higher refinery gasoline margins ($0.10 per gallon). EIA expects the regular-grade gasoline retail price to increase to an average of $3.71 per gallon in 2012, primarily due to higher crude oil costs (U.S. Gasoline and Crude Oil Prices Chart). Regular-grade gasoline prices peaked at $3.90 per gallon in April and are projected to average $3.79 per gallon during the summer season (April through September) compared with last summer’s average of $3.71 per gallon. Forecast regular-grade gasoline prices decline to an average of $3.67 per gallon in 2013.
EIA expects that on-highway diesel fuel retail prices, which averaged $3.84 per gallon in 2011, will average $4.06 per gallon in 2012, down 9 cents per gallon from last month’s Outlook. In 2013, diesel fuel retail prices are projected to decline to $4.03 per gallon, 8 cents per gallon lower than the previous Outlook (U.S. Diesel Fuel and Crude Oil Prices Chart).
Because taxes and retail distribution costs are generally stable, movements in gasoline and diesel prices are driven primarily by changes in both crude oil prices and wholesale margins. The retail price projections reflect higher prices for the average refiner acquisition cost of crude oil, which averages $110 per barrel ($2.61 per gallon) in 2012, compared with the $102-per-barrel ($2.43-per-gallon) average for 2011. EIA expects wholesale gasoline margins (the difference between the wholesale price of gasoline and the refiner acquisition cost of crude oil) will average 42 cents per gallon and 41 cents per gallon in 2012 and 2013, respectively, which are slightly higher than the previous 5-year average of 40 cents per gallon. In contrast, wholesale diesel margins are robust during the forecast interval due to strong world-wide demand for the fuel. In 2012, those margins average 60 cents per gallon, similar to the 2011 average and higher than the previous 5-year average of 52 cents per gallon. The diesel wholesale margin for 2013 remains wide, averaging 59 cents per gallon.