The national retail gasoline price per gallon (PPG) average dropped to $3.57 per gallon — its lowest level this year since Feb. 21, according to the monthly Wright Express (WEX) retail fuel report.
The national PPG average has been on a steady decline since it peaked on April 6 at $3.94. Prices in May were more than 20 cents per gallon below levels in May 2011, and analysts predict that declines will continue over the next several weeks.
Despite the drop in the national average, refinery issues have continued to cause West Coast prices to remain at levels well above $4 per gallon. Wholesale prices, though, have dropped tremendously over the past few days as most of the problems have been resolved, WEX said. Experts predict massive price drops in Washington, Oregon and California.
Diesel prices have fallen about 17 cents per gallon over the past 30 days. However, analysts point to the fact that diesel is the product used most globally and supplies are lower than they usually are this time of year. This could cause diesel prices to spike toward the end of the summer.
The two largest factors affecting the direction of fuel prices continue to be geopolitical events and the global economy, WEX said. A collapse in the Eurozone could send prices plummeting while an escalation in rhetoric with Iran could push prices in the opposite direction.
Typically, retail gasoline prices drop 10% from their spring peak, but then see a revival toward the middle of summer when hurricane warnings create fear of potential supply disruptions.