U.S. retail pump prices for diesel and gasoline increased only slightly this week in comparison with previous weeks, according to data compiled by the Energy Information Administration (EIA), rising just 2/10ths of a penny and 3.7 cents per gallon, respectively, for the two fuels.
However, diesel remains over $4 per gallon in every region of the country and the U.S. average of $4.159 is 10.6 cents per gallon higher compared to the same week last year, the agency noted. Gasoline also remains high at a U.S. average of $3.784, which is 6.7 cents per gallon higher compared to the same week in 2012.
The EIA noted in a special report that while the rise in gasoline and diesel prices are partly due to higher crude oil prices, most of the increase in the pump price of gasoline reflects an increase in what the agency calls the “gasoline crack spread,” which is the difference between the wholesale price of gasoline and the price of crude oil.
Between January 1 and February 19, the price of Brent crude oil—the waterborne light sweet crude grade that drives the wholesale price of gasoline sold in most U.S. regions—rose about $6 per barrel, or about 15 cents per gallon, the agency said.
“A simple calculation – one that modestly understates the role of higher crude prices to the extent that crude price increases during December 2012 were still not fully passed through in retail gasoline prices at the start of 2013 – suggests that about two-thirds of the rise in gasoline prices since the start of the year reflects such higher gasoline crack spreads,” EIA added.
Both planned and unplanned maintenance at several refineries is also pushing crack spreads for gasoline as well as diesel higher, with “offline” refinery capacity increasing from the beginning of 2013 to more than 1.7 million barrels per day (bbl/d) for the week ending February 15.
As a result, EIA estimates that gross inputs into U.S. refineries fell 9% – from 15.9 million bbl/d per day in mid-December to 14.4 million bbl/d for the week ending February 15.
Though the agency expects fuel prices to retreat somewhat as refinery capacity comes back on line, the changeover to “summer” fuel blends plus the expected “seasonal” uptick in driving that occurs during the spring and summer may work against fuel cost declines.
“U.S. refinery maintenance typically peaks in February, and we expect that many of the facilities that have recently decreased crude runs should return to normal operations in the coming weeks,” EIA pointed out.
“However, this increased supply will likely be countered by the seasonal increase in demand, which typically begins in the spring,” it stressed. “As a result, the short-term outlook for gasoline prices remains volatile [and] it is possible that a part of the rise in wholesale prices has not yet been fully reflected in pump prices.”
Nationally this week, diesel prices declined in four out of the 10 regions monitored by the EIA, with diesel prices dropping 1.1 cents per gallon in the Midwest followed by a 4/10ths of a penny per gallon decline for the Lower Atlantic and West Coast.
Diesel prices this week were highest in California ($4.365 per gallon) followed by New England ($4.344), the Central Atlantic ($4.262) and the West Coast ($4.221), the agency reported.
Gasoline prices increased in all regions of the U.S. this week except for the Midwest, where they dropped 2.8 cents per gallon, EIA said. The West Coast is home to the highest price for gasoline in the U.S. this week at $4.53 per gallon, followed by New England ($3.817) and the Central Atlantic ($3.806).