Retail gasoline prices this summer expected to be lowest since 2004

April 15, 2016

In the United States, slightly more than half of the vehicle-miles driven in a year occur in the six months from April through September. For the full-year 2016, EIA forecasts U.S. regular gasoline prices to average $1.94/gal. Based on this annual average price, EIA estimates the average household will spend about $350 less on gasoline in 2016 than in 2015 and about $1,000 less than in 2014, when retail gasoline prices averaged more than $3/gal.

Gasoline prices have four main components: crude oil prices, wholesale margins, retail distribution costs, and taxes. Because the latter two are generally stable, movements in gasoline prices are primarily the result of changes in crude oil prices and wholesale margins. Each dollar per barrel of sustained price change in crude oil and/or gasoline wholesale margins results in a change of 2.4 cents/gal in product prices.

Read entire article at Penn Energy.

 

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