Radical Difference in U.S. Gas Prices Nationwide Give Insight Into Economics of Oil
By: Scott Picken
Updated: January 4, 2013
CHICAGO -- What goes into the price of a gallon of gas? An unusual price drop in the Rocky Mountain region gives insight into fluctuations of the price of a gallon of regular unleaded.
Currently, the majority of gas stations in the Rocky Mountain region are selling at under $3/gal. according to the website gasbuddy.com. They include:
CO: $2.89/gal.
WY: $2.88/gal.
UT: $2.92/gal.
ID: $2.99/gal.
Illinois gas prices are more than 10% higher. Why the difference? An analysis from gasbuddy.com.
Access to Canadian crude oil:
"The Rockies region is doing very well as they are insulated from the higher price of West Texas Intermediate crude oil and can capitalize on the less expensive crude from Canada. On the last day of 2012, WTI closed at $91.82 per barrel while the Canadian crudes averaged $72.11 on the same day," said Patrick DeHaan, senior petroleum analyst, GasBuddy.com.Regional Gas Inventory: Gasbuddy figures show the Rockies gasoline inventory has increased by 17% in the past month while U.S. inventory increased by 11% over the same period.
Refinery Output: ".. the region's refinery output during the month of December was 95.2%, while nationwide (including the Rocky Mountain region) refineries operated at 90%. Today's report from the Dept. of Energy has the region's refinery utilization rate at 96.9% , so it really doesn't get much better than that," DeHaan noted.
Taxes also play a role. Federal, state and local taxes add 57.3 cents to a gallon of gasoline in Illinois according to the American Petroleum Institute, one of the highest rates in the nation. Colorado's combined federal, state and local gas tax is just 40.4 cents a gallon.
