Chief Economist John Felmy of the American Petroleum Institute (API) told the U.S. Federal Trade Commission today that gasoline prices have held steady for four weeks. They had been rising since mid-December after crude oil prices began moving sharply higher.
Prices for regular grade gasoline peaked at $1.41 per gallon on April 10, Felmy said, citing U.S. Energy Information Administration data. He said prices had slipped to $1.40 per gallon by May 6.
Felmy noted that the May 6 price was more than 30 cents less per gallon than the same time last year—and $1.29 less than in 1981, when gasoline reached its all-time-high price, adjusted for inflation. He said that gasoline prices in December, before the increases began, were at near-record lows.
Felmy said crude oil prices had increased by $10 per barrel since December or more than 55 percent. Rising crude oil prices reflected the removal of two million barrels per day of crude oil from world markets in early 2002 and growing tensions in the Middle East.
Felmy also noted that government requirements to make and distribute 19 different regionally-blended gasolines were a continuing influence on gasoline prices. He said they reduce the flexibility refiners and distributors need to keep gasoline flowing when unforeseen circumstances affect supplies from one region or one company.
Originally posted on Fleet Financials