As we all know, retail gasoline prices frequently fluctuate. But do you really know why?
Retail gasoline prices are mainly affected by crude oil prices and the level of gasoline supply relative to gasoline demand. Strong and increasing demand for gasoline and other petroleum products can place intense pressure on available supplies.
Gasoline prices tend to increase when the available supply of gasoline decreases relative to real or expected gasoline demand or consumption. Gasoline prices can change rapidly if something disrupts crude oil supplies, refinery operations, or gasoline pipeline deliveries. Even when crude oil prices are stable, gasoline prices fluctuate because of seasonal changes in demand and in gasoline specifications.
Historically, retail gasoline prices tend to gradually rise in the spring and peak in late summer when people drive more frequently. On the flip side, gasoline prices are generally lower in winter months. Gasoline specifications and formulations also change seasonally. Environmental regulations require that gasoline sold in the summer be less prone to evaporate during warm weather. This requirement means that refiners must replace cheaper but more evaporative gasoline components with less evaporative but more expensive components.
These fluctuations make tracking average fuel costs an important factor for many businesses in managing their fleet, tracking business profits and providing insight when making certain business choices. There are so many ways to utilize this valuable information in today’s economy.
A great resource for gasoline and diesel fuel pricing updates is The U.S. Energy Information Administration. You can access historical information, analysis & projections, as well as sign up for email updates.
You can also view retail gas and diesel prices by region. You can filter by product (regular, midgrade, premium, diesel) as well as by period (weekly, monthly, annual). Data is reported in dollars per gallon, including taxes. Click here for access to this report.
So although gasoline prices vary and are out of our control, resources are available to help you track and project costs based on current and historical data. If you have any questions, please contact us today!