Prices at the pump prompt political posturing

Drivers in New Jersey and around the nation are still seeing prices at the pump go up amid increasing demand as supplies remain low due to shutdowns around the globe, but while spin doctors on both sides of America’s vast political divide are pointing fingers the real cost of fuel is not above historic levels when adjusted for inflation.

The national average retail price of gasoline in the United States has climbed to $3.291, according to the U.S. Energy Information Administration (EIA).

Gasoline prices are on the rise, and Republicans are licking their chops but that is still less than the $3.906 per gallon peak in May 2011, during the Obama administration or the $4.054 in June 2008 that was the top cost when George W Bush was president.The $2.30 to $2.90 price hike during the first few months of the Trump administration was only marginally better

The EIA publishes retail gasoline prices, including taxes, for selected cities and states dating back to 2000. Weekly prices, average monthly prices, and average annual prices by grade and formulation are available.

EIA also publishes U.S. regular-grade gasoline prices showing both actual prices at the pump and those costs adjusted to show those rates with a corresponding figure than is the value in terms of today’s dollar.

Gas prices change for all sorts of reasons.

Recent gasoline price increases reflect increasing crude oil prices outweighing falling gasoline wholesale margins.

EIA forecast that retail gasoline prices will average $3.21/gal in October before falling to $3.05/gal in December.

The average price of gasoline in the United States increased in March 2011, due to a significant drop in Libyan production and fears of more instability in other countries.

In April, EIA forecast an increase in demand for petroleum products during the 2021 summer driving season as the impacts of COVID-19 diminish in the United States.

EIA’s annual Summer Fuels Outlook, released with EIA’s Short-Term Energy Outlook (STEO), predicted a 15% increase in U.S. highway travel over the summer but still less highway travel than in the summer of 2019.

EIA also forecasts the Brent crude oil price will average $64 per barrel this summer, a 78% increase from last summer’s average of $36 per barrel.

That price increase paired with an increase in gasoline and diesel demand will likely increase the cost of regular gasoline and diesel fuel this summer.

EIA expected the retail price of regular-grade gasoline in the United States would average $2.78 per gallon (gal) over the summer, compared with last summer’s average of $2.07/gal. For diesel fuel, EIA predicted retail prices would average $2.91/gal this summer, up from an average of $2.43/gal last summer.

“The increase in fuel consumption we are forecasting for the summer driving season is a reflection of optimism about the U.S. economy as COVID-19 vaccinations and fiscal stimulus support continued recovery,” said EIA Acting Administrator Stephen Nalley. “There remains a lot of uncertainty, but rising levels of employment, disposable income, and consumer spending point to an improving U.S. economy.”

Retail gasoline prices recently reached their highest levels in almost two years, hitting an average of $2.87/gal on March 22. Increasing U.S. refinery production along with rising crude oil supply from OPEC, its partner countries, and U.S. tight oil producers should help bring those prices down. EIA forecasts retail gasoline prices to gradually fall to an average of $2.62/gal by September.

EIA’s STEO forecast relies on the macroeconomic model from IHS Markit, from which EIA assumes U.S. GDP growth will be 8.5% higher this summer than last.

The entire Short-Term Energy Outlook is available on the EIA website. EIA will publish a summer electricity outlook with next month’s STEO on May 11.

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