Gasoline prices in America continue to decline year-on-year, as global crude oil prices continue to decline, amid economic uncertainty and oversupply.
A report issued by the US Energy Information Administration, today, Thursday, May 25, 2023, showed that the average retail price of regular gasoline – adjusted for inflation – in the United States was $ 3.53 a gallon on Monday (May 22), down 26%. ($1.24 per gallon) for the same time in 2022.
The EIA’s estimates come ahead of the Memorial Day holiday (May 30) in the United States, during which car travel is expected to increase, as monitored by the Energy Research Unit.
Gasoline prices in America during the Memorial Day holiday last year were at their highest levels since 2012, with crude prices jumping at that time due to the repercussions of the Russian-Ukrainian war.
For the whole of 2023, average gasoline prices in America are expected to fall to $3.33 a gallon, down from $3.97 a gallon last year.
Gasoline prices in the United States
The decline in gasoline prices in America, on an annual basis, came with the decline in crude oil prices – which represent more than half of the retail price of gasoline -.
As of May 23, the average spot price for Brent crude during this month was $76 per barrel, representing a decrease of 35% ($41 per barrel) from the average for the same month in 2022.
The decline in oil prices this year comes with the increase in the global supply of crude – despite the official and voluntary production cuts decided by the OPEC + alliance – and the slowdown in economic activity due to the acceleration of inflation, according to the report, which was followed by the Energy Research Unit.
Although gasoline prices in America have decreased compared to last year, they are still higher than they were during 2019 and 2021, due to declining inventories.
Gasoline inventories in the United States fell by 2.1 million barrels during the week ending May 19, to reach 216.3 million barrels, according to the latest weekly report from the Energy Information Administration.
US gasoline inventories stand at a level that is 10% lower in the May average so far, compared to the average for the past 5 years for the same time of the year, with consumption increasing since the Corona pandemic.
The following graphic – prepared by the Energy Research Unit – illustrates the determinants of gasoline prices in the United States:
Gasoline price differences by region
Gasoline prices in the United States vary regionally, due to local supply and demand conditions, government fuel specifications, and state taxes.
Retail gasoline prices are usually higher on the US West Coast because of the region’s limited connections to other major refining centers and fuel taxes above the national average.
In contrast, gasoline prices in the US Gulf Coast region are usually the lowest in the country, as half of the US’s refining capacity is located.
Before Memorial Day weekend, retail gasoline prices averaged $4.51 a gallon on the West Coast, while they were $3.04 on the Gulf Coast.
Retail gasoline prices averaged $3.38 per gallon in the East Coast, and were $3.47 and $3.58 per gallon in the Midwest and Rocky Mountain regions, respectively.
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