U.S. retail gasoline prices rose about 7 percent over the past two weeks, but consumers may soon see some relief as gasoline supplies are expected to increase, according to an industry analyst.
The national average for self-serve regular unleaded gas was $2.665 a gallon on April 7, up about 16.51 cents per gallon in the past two weeks, according to the nationwide Lundberg survey of about 7,000 gas stations.
In the past six weeks, prices have surged about 42.4 cents per gallon.
The primary driver behind the price surge were costs from refiners converting to new, cleaner fuel specifications, which added about 14 cents per gallon to what distributors and retailers pay, said survey editor Trilby Lundberg.
Higher crude oil prices also added 7 cents or 8 cents to their gasoline price rise, she said. Gas retailers’ profit margin shrank by an average of about 6 cents loss per gallon in the past two weeks as their buying prices rose more than retail prices.
Still, Lundberg said an expected increase in refining capacity could put a stop to surging prices at the pump.
“If we assume some slight slippage in crude oil prices because there is enough supply, and if most, if not all, of the new costs to make gasoline according to this year’s different specifications pass through, then the end of the retail price run up will come very soon,” she said.
Many U.S. refineries are currently idle to convert to fuel specifications dictated in the new energy bill and Environmental Protection Agency regulations, repair damage from last year’s hurricanes, and for seasonal maintenance.
Lundberg said as that refineries come back on line, gasoline supplies will probably increase, allowing prices to peak and then slip. She said the scenario could play out in two to three weeks.
Gas retailers’ shrinking margins could offset price decreases somewhat as they move to fully recover their costs, Lundberg said.
According to the survey, the city with lowest average price for self-serve regular unleaded gas was Salt Lake City, Utah, where the price was $2.28 a gallon. Honolulu had the highest average price of $2.88 a gallon.