Never Below $3
Published in CSP Daily News
U.S. average gasoline, diesel prices over $3 per gallon throughout 2011: EIA
WASHINGTON -- The average price U.S. drivers paid for gasoline and diesel during 2011 never fell below $3 per gallon, marking the first time the national pump price for both transportation fuels topped $3 per gallon throughout a calendar year, according to Today in Energy from the U.S. Energy Information Administration (EIA).
Based on EIA's weekly survey of retail fuel prices at gas stations around the country, the cheapest average price for regular gasoline during 2011 was $3.07 per gallon on January 3, and the highest price was $3.97 per gallon on May 9. The average gasoline price in 2011 was $3.52 per gallon, up from $2.78 per gallon in 2010 and $2.35 per gallon in 2009. The last time EIA's weekly gasoline price was under $3 per gallon was on December 20, 2010.
The American Automobile Association's (AAA) daily survey of gasoline prices also never dropped below $3 per gallon last year.
Crude oil, which accounted for more than 60% of the cost of making the fuels, was the main reason drivers had to pay more to fill up at the pump. At the same time, the difference between the prices of gasoline and diesel reached its widest level on record due mostly to stronger diesel demand.
The gap in the prices for gasoline and diesel reached a record 66 cents per gallon in late November. The price difference increased the most during the fourth quarter of 2011.
As summer transitioned to winter, refiners were able to switch to making winter fuel blends. Unlike summer blends, which must meet cleaner federal burning specifications to decrease summer smog pollution, winter fuel blends cost less to refine and thus the resulting gasoline is less expensive. Gasoline demand was also about 4% lower in the fourth quarter compared to the same period a year earlier. Demand for distillates, which includes diesel fuel, was up 5% during the quarter.
Meanwhile, record U.S. diesel exports and higher diesel fuel demand from truckers transporting more finished goods and raw materials as the American economy improved also put upward pressure on diesel prices.
Higher gasoline and diesel prices mostly reflected higher crude oil prices (click here for details), which rose in 2011 in response to the disruption in Libya's oil production and expected stronger oil demand as the global economy improved. The average spot price for West Texas Intermediate crude oil was $94.87 per barrel in 2011, up from $79.48 per barrel the year before and $61.95 per barrel two years earlier.
The lowest price for diesel fuel in 2011 was $3.33 per gallon during the first two weeks of January, while the highest price was $4.12 per gallon on May 2, during a six-week period when diesel averaged more than $4 per gallon. The national pump price for diesel has not been under $3 per gallon since September 27, 2010.
Gasoline and diesel prices vary by region with prices higher on the West Coast because of more stringent air quality rules and less expensive along the Gulf Coast where many refineries are located. Pump prices were most volatile in the Midwest, where several pipeline shutdowns last year disrupted delivery of oil to refineries.
Click here to view all charts.
Meanwhile, the U.S. average retail price of regular gasoline rose just over eight cents last week to reach $3.38 per gallon, EIA said in its latest This Week in Petroleum report. The average price is about $0.29 per gallon higher than last year at this time. The Gulf Coast saw the largest increase at just over 10 cents per gallon to put prices at $3.20 per gallon. The East Coast followed with an increase of just over nine cents per gallon to reach $3.41 per gallon. The Midwest saw an increase of almost nine cents per gallon, while the West Coast saw the smallest increase of six cents per gallon, but prices there remain the highest in the Nation at $3.61 per gallon. Going against the trend, the Rocky Mountain average price decreased about two cents per gallon to $3.01 per gallon.
The national average diesel price rose for the first time in seven weeks, increasing almost a nickel to $3.83 per gallon. The diesel price is 50 cents per gallon higher than last year at this time. Prices on the East Coast saw the largest regional increase at just over six cents per gallon to put prices at $3.91 per gallon. The Rocky Mountains saw the smallest increase (less than a penny per gallon) to reach $3.84 per gallon. The Midwest, Gulf Coast and West Coast regional prices each increased about three, four, and five cents per gallon respectively. Prices on the West Coast remain the highest in the nation at $4.03 per gallon.