|Gasoline retail cost versus wholesale costs|
|Wednesday, 01 August 2012 15:17|
On July 17, despite decreases in crude and wholesale unleaded prices, the entire greater Fort Wayne area increased prices by an average of 25 cents. These increases were area wide and most increases occurred within a period of approximately one hour. Since there were declining costs in all areas of the supply market, I have taken this matter up with the U.S. House of Representatives and they have reviewed all the supplied data. This data has been assessed by members of the U.S. House of Representatives and has now been sent to the Indiana State Attorney General for review.
With the Euro Crisis and the suspended trading of Italian bank stocks, the commodity market has declined as traders became skittish about the Global economy and gasoline demand. The severe flooding in China will pull down their demand for at least the next four months. The crude and wholesale unleaded gasoline futures declined during this period.
The next few weeks should see prices holding stable and perhaps declining by another 15 cents or so due to the lowered worldwide demand. (It should be noted that in excess of 50 percent of all refined oil products, including gasoline are currently exported from the USA). The refineries are running at normal levels of approximately 75 percent and all supply chains are operating normally.
Another issue which may impact future pricing is that ethanol has risen recently, due to the drought conditions in the USA. However, as a maximum content of 10 percent ethanol is in regular gasoline, the maximum economic impact would be approximately six cents per gallon. However, since the futures will not be delivered until September 2012, there should be no impact from this issue until mid to late September.
I will be continuing to work with the US House and the State Attorney General’s office and post the actions, responses and comments in this newspaper, should they be kind enough to carry it.
P.S. Despite crude oil declines and stable unleaded futures local area gas stations raised prices by 28 cents to a high of 3.75.9. Nothing in the market dictates this increase.