U.S. gasoline prices have been decreasing and the U.S. Energy Information Administration (EIA) expects that the current low crude oil prices will contribute to further declines in gasoline prices. The U.S. average price for regular gasoline as of Dec. 29 was $2.29 per gallon, down 11 cents from the previous week, and $1.04 lower than the same time last year.
Florida’s average price on Dec. 26 was $2.35; Georgia was $2.25; California was $2.68; New York was $2.77; and Texas was $2.05.
U.S. retail gasoline prices reflect four key components: the price of crude oil; refining costs and profit margins; retail and distribution costs and profit margins and taxes. The first two factors tend to be more volatile, causing most of the variation in retail gasoline prices, while the latter two reflect the retail portion and tend to be relatively stable.
A general guideline for how crude oil prices affect gasoline is that a $1-per-barrel change in the price of crude oil translates into a change of about 2.4 cents per gallon of gasoline. (There are 42 gallons in one barrel, and 2.4 cents is about 1/42 of $1.) The price of crude oil varied from $54.59 – $58.72 on Friday, Dec. 26.