BROOKLYN PARK, Minn. -- Motorists in the Rocky Mountain region are enjoying considerably lower gasoline prices than the rest of the United States, due to healthy gasoline inventories, the availability of cheap Canadian crude and refineries that operate exceptionally well, according to the GasBuddy.com blog.
"The Rockies region is doing very well as they are insulated from the higher price of West Texas Intermediate crude oil and can capitalize on the less expensive crude from Canada. On the last day of 2012, WTI [West Texas Intermediate crude oil] closed at $91.82 per barrel while the Canadian crudes averaged $72.11 on the same day," said GasBuddy.com senior petroleum analyst Patrick DeHaan.
"From a supply perspective the Rockies gasoline inventory has increased by 17% in the past month while the U.S. inventory increased by 11% over the same period," he said.
Click here to view full U.S. Energy Information Administration (EIA) gasoline data.
"At the same time, the region's refinery output during the month of December was 95.2%, while nationwide (including the Rocky Mountain region) refineries operated at 90%. [Friday's] report from the Department of Energy has the region's refinery utilization rate at 96.9% , so it really doesn't get much better than that," he said.
Click here to view full EIA refinery data.
Fellow GasBuddy senior petroleum analyst Gregg Laskoski, said, "Consequently, 60% of gas stations (2,848 out of 4,712) in the Rocky Mountain region have gas below $3 per gallon. Only 24% of stations in the rest of the U.S. are below $3."
For all 50 states, 26.1% were below $3 on Friday, he said.
The reason: "The logistics of the region create a lag effect that keeps gasoline price trends there about two weeks behind what we see in the rest of the country," said DeHaan.
In its This Week in Petroleum report dated Jan. 4, the EIA said that the U.S. average retail price of regular gasoline increased four cents to $3.30 per gallon, down a tenth of a penny from last year at this time. Prices increased in all regions of the nation except the Rocky Mountains, where the price decreased eight cents to $3.02 per gallon. The East Coast, Gulf Coast and Midwest prices all increased a nickel, to $3.40 per gallon, $3.11 per gallon and $3.22 per gallon, respectively. Rounding out the regions, the West Coast price increased three cents to $3.46 per gallon.
The national average diesel fuel price decreased less than a penny to remain at $3.92 per gallon, 14 cents higher than last year at this time. The U.S. average diesel price has decreased 12 cents in the last five weeks. The price on the East Coast was unchanged from last week at $4.01 per gallon. On the West Coast, diesel fuel remained at $3.99 per gallon, up less than a penny from last week. The Rocky Mountain price dropped a nickel to $3.75 per gallon, while the Midwest and Gulf Coast prices decreased less than a penny to remain at $3.89 per gallon and $3.83 per gallon, respectively.
AAA reported on Dec. 31 that gasoline prices in 2012 were the most expensive annual average on record at $3.60 a gallon. The previous annual record was $3.51 a gallon set in 2011, while the third most expensive year for gas prices was 2008, when the average was $3.25 a gallon.
The national average has broken a daily record high for 134 consecutive days for a total a 248 days in 2012. Motorists paid record-high gasoline prices on 68% of the days during the year. The highest daily national average of the year was $3.94 a gallon on April 5 and 6, while the lowest daily national average was $3.22 a gallon on Dec. 20.
The motorist association said states with the most expensive annual averages for 2012 included Hawaii ($4.31), Alaska ($4.09), California ($4.03), N.Y. ($3.90) and Connecticut ($3.90). The states with the cheapest annual averages included South Carolina ($3.35), Missouri ($3.38), Mississippi ($3.39), Tennessee ($3.40) and Oklahoma ($3.41). The highest daily statewide average of the year was $4.67 in California on Oct. 9, while the lowest daily statewide average was $2.91 a gallon in South Carolina on July 3.
The daily average for regular gasoline dropped below $3 per gallon in only eight states at some point during the year, AAA said, while daily averages increased above $4 per gallon in 11 states (and Washington, D.C.) at some point.
Gasoline prices averaged $3.30 a gallon nationally in December, said the group, which was the lowest monthly average of the year. The national average declined 11 cents per gallon (3.25%) in December and declined on 22 days during the month. Gasoline prices nationally have fallen nearly 58 cents a gallon (14.96%) on average since Sept. 14, the day before much of the nation began the transition to winter-blend gasoline. Gasoline prices have dropped as a result of decreased demand, increased supplies and the switchover to less-expensive winter-blend fuels.