According to the Wright Express Retail Fuel Price Index monthly report, retail gasoline prices have dropped to nearly $3.30 per gallon in the start of the second half of the year — close to where they started in January. Prices declined by more than 30 cents per gallon over the past month and are about 25 cents per gallon less than the same time last year.
Two states already have averages under the $3 per gallon mark and 17 states have at least 1% of their stations priced below that threshold.
As of press time, however, wholesale prices were up about 15 cents per gallon with the understanding that the market couldn’t get much lower. It is typical that the market rallies in July and August after the correction from the spring rally. And this year traders are interpreting how the Iranian sanctions will impact supply and what the bailout plans for Europe mean. In addition, refinery disruptions often pop up due to rogue thunderstorms, and hurricane fears tend to get traders revved up when probability cones offer the slightest chance that a storm could disrupt supply.
Experts predict that some of the lower priced areas could see prices head north again, but not by any large amount. Some of the higher priced areas like the West Coast still have room to go down, and prices should continue to fall, albeit at a fairly slow rate before flat lining in the coming weeks.
The good news for fleet managers is that by mid-September, when refiners can switch to the cheaper and easier ways to make winter spec fuel, prices will likely see a sizeable drop. This is especially true if weather forecasters give an all clear for any tropical storms.
In the meantime, diesel prices are down to $3.65, their lowest level since February 2011. However, some analysts believe that diesel prices could see gains in the second half of the year, which is typical for distillate prior to heating season.