Lundberg in

CSP, July 25, 2022:
Street Price Down 32 Cents Per Gallon
High retail gasoline margin on a tightrope

CSP, July 11, 2022:
As Oil Price Drop Moves to the Street ...
… Retail margin reaps momentary bonanza

CSP, June 27, 2022:
Oil, Wholesale Gasoline Prices Plunge
Retailers having a moment

CSP, June 13, 2022:
Pump Price Is $5.10 for Regular-Grade Gas
Shocking $1.97 above 1-year ago

CSP, May 23, 2022:
Pump Price Screams 33 Cents Higher to $4.71
For summer 2022, stars aligning to ugly

CSP, May 9, 2022:
Petroleum Price Hikes, Nervous Markets
Low retail gasoline margin unsustainable

CSP, July 25, 2022:
Street Price Down 32 Cents Per Gallon
High retail gasoline margin on a tightrope

CAMARILLO, Calif. The national average retail price of regular-grade gasoline dropped a massive 31.6 cents per gallon (GPG) in the past two weeks, to $4.5448, according to the most recent Lundberg Survey of U.S. fuel markets.

In the past six weeks, it fell a total 55.42 cents. A near-parallel of statistics: In those six weeks, retail gasoline margin zoomed up by that amount and then some.

In the period June 10-July 22, U.S. average retail gasoline margin on regular grade as measured by Lundberg has climbed a booming 58.62 cents, from its ultra-depressed 21.20 cents on June 10 to an inflated 79.82 cents on July 22. It is a passing phenomenon: As steep wholesale price cuts at the racks traverse hundreds of distribution points into thousands of competitors' waiting arms, more street price cutting can be expected.

Oil price cuts in the past two weeks were exceeded by slashed wholesale gasoline prices from U.S. refiners. Rack price cuts exceeded not just oil price cuts but gasoline futures price cuts as well. Recent oil price weakness responding to output recovery in Libya and global market expectations of recession outweighed the continuing oil price supports which include unlikely big OPEC+ production improvements or big U.S. output resurgence, and an expectation that Russian oil sales will continue to be higher than sanctions had earlier indicated they would be.

In the U.S. gasoline market, demand is running scared. There are signs that despite recent price cuts, marketers and retailers, and motorists too, are dragging their feet to refill tanks. The U.S. average street price is $1.324 above its year-ago point, but may feel worse thanks to the extreme leaps in price of virtually all other goods as well, all vying for chunks of spending budgets.

A month ago, refiners had lost gasoline margin during the prior two weeks while retailers gained gasoline margin, and the same thing has happened again since July 8. But this time, the retail margin gain was just a nickel versus nearly 13 cents during June 24-July 8. On a national average basis, it appears that retailers will not be hanging on much longer to this gasoline margin bonanza. Behind the seemingly flush national retail margin picture are some narrow margin cities such as Honolulu, less than 27 cents; Newark, under 37 cents; and 43 cents in Philadelphia.

Before any "gee whiz!" accusations of swollen retail margin get loud, defenders should convey that swelling business costs gobble up retailers' resources, of which rising credit-card swipe fees, up 45% just since 2019 per Lundberg Letters latest study, are just one.

Click here for previous Lundberg Survey reports in CSP Daily News.

Trilby Lundberg is publisher of the Lundberg Survey of U.S. fuel markets. Lundberg Survey Inc. is based in Camarillo, Calif.

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