Trips to the fuel pump are getting more expensive and consumers can expect more of the same until at least September.
According to the summer fuels outlook released by the U.S Energy Information Administration (EIA), the average retail price of gasoline this summer is expected to be $2.74 a gallon, up from $2.41 a gallon last summer. The price surge largely is because of the increase in Brent crude oil prices, which are expected to average $12 per barrel higher than last summer.
Daily and weekly averages, in addition to regional differences, can vary significantly from this projected average, as much as 50 cents a gallon in some areas. Refinery outages can also cause disruptions that result in unanticipated higher gasoline prices.
The EIA projects that the West Coast will have the most expensive gasoline at $3.22 a gallon and the Gulf Coast will have the least expensive at $2.45 a gallon. In some West Coast locations, prices already have eclipsed $4 a gallon.
Additionally, the EIA forecasts that motor gasoline consumption also will increase, with an average of 9.56 million barrels per day (b/d), up almost 20,000 b/d from last summer.
For diesel fuel, the EIA estimates the retail prices will be $2.92 a gallon this summer, higher than last summer’s average of $2.59 a gallon. This increase is because of higher wholesale diesel margins and crude oil prices.
Consumption also is expected to rise, with 4.0 million b/d this summer, which is 100,000 more than last summer’s consumption. The increase is because of a combination of economic growth, industrial output, and international trade activity. This estimate is the highest since 2007 when consumption averaged 4.1 million b/d.
As of May 21, 2018, the current national average for gasoline is $2.92 a gallon, while diesel is $3.28 a gallon.
While these prices are an increase from last summer, last summer’s retail gasoline prices were the second lowest since 2005. Gasoline retail prices this summer are still expected to be 15 cents a gallon lower than the average price from the previous five summers of $2.89 a gallon. Diesel fuel retail prices are still expected to be 17 cents a gallon lower than the previous 5-year average of $3.09 a gallon.