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User:Oceanflynn/sandbox/Gasoline usage and pricing in the United States

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Gasoline usage and pricing in the United States results from factors such as crude oil prices, processing and distribution costs, local demand, the strength of local currencies, local taxation, and the availability of local sources of gasoline (petrol). Since fuels are traded worldwide, the trade prices are similar. The price paid by consumers largely reflects national pricing policy. According to the United States Department of Energy (DOE)'s agency U.S. Energy Information Administration (EIA)'s March 2015 website 136.78 billion gallons or 3.26 million barrels a day of gasoline were consumed in the United States in 2014 which is "about 4% less than the record high of about 142.35 billion gallons or 3.39 billion barrels a day consumed in 2007."[1] In a New York Times 12 April 2015 article gasoline industry analyst Trilby Lundberg said that retailers and refiners dropped the price of regular gasoline in March and April to USD$2.45 a gallon in spite of a rise in crude oil prices to compete for customers.[2]

Gasoline consumption in the United States

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Demand for gasoline rose unexpectedly and quickly in 2015 according to Robert Campbell, an analyst at Energy Aspects, a London-based consulting company.[3] In the first quarter of 2015 Americans drove a record 720.1 billion miles which is the equivalent of "about 3,900 return trips to the sun" consuming 8.71 million barrels of gasoline a day.[3]

By 2011 US petroleum consumption reached an estimated 18.87 million barrels per day (3,000,000 m3/d) and was expected to increase to 18.96 million barrels per day (3,014,000 m3/d) in 2012. In 2011 drivers in the United States traveled 500,000 miles (800,000 km) per day,[citation needed] and were expected to travel 8.158 billion miles (1.3129×1010 km) in 2012. This equates to an average of 33 miles (53 km) per vehicle per day. On average, US drivers consumed 1.49 US gallons (5.6 L) of gasoline per day, or about 10.44 US gallons (39.5 L) per week.[4] As of March 2013, the average price for 87 octane gasoline was $3.22 a US gallon (85¢/L). According to the Cambridge Energy Research Associates in a 2008 report the peak year of gasoline usage in the United States was 2007. Record energy prices in 2007 caused an "enduring shift" in energy consumption practices.[5] According to the report, in April fuel consumption had been lower than a year before for the sixth straight month, suggesting 2008 would be the first year US usage declined in 17 years. The total annual distance driven in the US began declining in 2006.[6]

Price of gasoline

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Percentage of cost for gasoline and diesel in the United States.

From April to June 2015 the retail price of a gallon of gasoline in the U.S. rose 16 percent to USD$2.803. According to Heathrow, the Florida-based American Automobile Association (AAA), this is almost the highest price since November 2014.[3]

Gas prices hit the highest average ever— USD$3.680 — in 2012.[1][7] with New York at $3.70/gal (98¢/L) for the highest in the US, and Colorado at $2.987/gal (79¢/L) for the lowest.[8]

Average price of a gallon of gasoline in the United States (EIA)[1]
2009 2010 2011 2012 2013 2014 2015
2.406 2.835 3.576 3.680 3.575 3.437 2015

Price of gasoline in California

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The most expensive gas in American cities surveyed in in the Lower 48 states was in California's San Francisco Bay Area with the price of a gallon at USD$3.13. The average national price in April 2015 was USD$2.66 for midgrade gas and USD$2.83 for premium.[2]

In 2013 the average price for a regular gallon of gas was USD$3.82.[2]

Petroleum products

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Finished motor gasoline amounts to 44% of the total US consumption of petroleum products.[9] This corresponds to 18.5 exajoules per year. As of 2012 the cost of crude oil accounted for 62% of the cost of a gallon of gasoline in the United State while refining accounted for just 12%. Taxes and distribution/marketing accounted for 12% and 14% respectively.[10]

Shale oil boom

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The shale oil boom in recent years in the United States created a production surge in lighter oil which is ideal for refineries who produce gasoline.[3] About two million oil and gas wells in the US—made economically productive using hydraulic fracturing— produced up 43% of American oil production in 2013.[11][11][12] As a result American refineries have been using "the lightest crude in March 2015 since April 1991." This lighter oil yields "more gasoline than heavy crude like the bitumen from Canada’s oilsands."[3] The International Energy Agency claimed this production surge which contributed to a global supply shock and the subsequent drop in the price of crude oil—would reshape the way oil is transported, stored, refined and marketed.[13]

Renewable Fuel Standard

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Main article: Renewable Fuel Standard

The federal Renewable Fuel Standard (RFS) effectively requires refiners and blenders to blend renewable biofuels (mostly ethanol) with gasoline, sufficient to meet a growing annual target of total gallons blended. Although the mandate does not require a specific percentage of ethanol, annual increases in the target combined with declining gasoline consumption has caused the typical ethanol content in gasoline to approach 10%. Most fuel pumps display a sticker that states that the fuel may contain up to 10% ethanol, an intentional disparity that reflects the varying actual percentage. Until late 2010, fuels retailers were only authorized to sell fuel containing up to 10 percent ethanol (E10), and most vehicle warranties (except for flexible fuel vehicles) authorize fuels that contain no more than 10 percent ethanol.[14]

Effect of natural disasters on the price of gasoline

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After Hurricane Katrina and Hurricane Rita, gas prices started rising. They became record high levels. In terms of the aggregate economy, increases in crude oil prices significantly predict the growth of real gross domestic product (GDP), but increases in natural gas prices do not.[15]

All the damages from the hurricanes ran up gas prices. By 30 August, a day after Katrina’s landfall, prices in the spot market, which typically include a premium above the wellhead price, had surged pass $11 per gigajoule ($12 per million British thermal units), and by 22 September 2005, the day before Rita’s landfall, the spot price had risen to $14/GJ ($15 per million BTU).[15]

Gasoline taxation in the United States

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Main article: Fuel taxes in the United States

The United States federal excise tax on gasoline is 18.4 cents per gallon.[16][17] On average, as of April 2015, state and local taxes add 30.5 cents to gasoline and 29.7 cents to diesel, for a total US average fuel tax of 48.9 cents per gallon for gas and 54.1 cents per gallon for diesel.[18]

In 1956 President Eisenhower signed the Federal-Aid Highway Act and created the Highway Trust Fund to funding the Interstate System with an increase of tax on gasoline to 3 cents. Other taxes such as excise taxes on gasoline, tire rubber, tube rubber, and the sales tax on new trucks, buses, and trailers were also credited to a new Highway Trust Fund.

The Federal-Aid Highway Act of 1959 increased of the gas tax to 4.5 cents a gallon. This tax remained in place until the Surface Transportation Assistance Act of 1982 when President Reagan increased the tax to 9 cents.

The Superfund Amendments and Reauthorization Act of 1986 added 0.1 cent tax on gasoline for the Leaking Underground Storage Tank Trust Fund.

President George H. W. Bush's Omnibus Budget Reconciliation Act of 1990 increased the Federal gas tax by 5 cents, with half the increase going to the Highway Trust Fund, the other half to deficit reduction.

President Bill Clinton's Omnibus Budget Reconciliation Act of 1993 increased the gas tax by 4.3 cents, bringing the total tax to 18.4 cents per gallon.

State taxes on gasoline

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Gas tax by state, with border differences highlighted.

The first US state tax on fuel was introduced in February 1919 in Oregon.[19] It was a 5¢/gal (1.3¢/L) tax. In the following decade, all of the U.S. states (48 at the time), along with the District of Columbia, introduced a gasoline tax. By 1939, an average tax of 3.8¢/gal (1¢/L) of fuel was levied by the individual states.[19]

Taxes on gasoline and diesel for transportation by U.S. state in U.S. cents per gallon as of April 2015[18]
State Gasoline tax
(includes federal tax of 18.4¢/gal)
US (Volume-Weighted) Average 48.9
Alabama 39.3
Alaska 29.7
Arizona 37.4
Arkansas 40.2
California 66.0
Colorado 40.4
Connecticut 59.3
Delaware 41.4
District of Columbia 41.9
Florida 54.8
Georgia 44.9
Hawaii 62.1
Idaho 43.4
Illinois 52.5
Indiana 51.3
Iowa 50.4
Kansas 42.4
Kentucky 44.4
Louisiana 38.4
Maine 48.4
Maryland 48.7
Massachusetts 44.9
Michigan 51.5
Minnesota 47.0
Mississippi 37.2
Missouri 35.7
Montana 46.2
Nebraska 44.9
Nevada 51.6
New Hampshire 42.2
New Jersey 32.9
New Mexico 37.3
New York 62.9
North Carolina 54.7
North Dakota 41.4
Ohio 46.4
Oklahoma 35.4
Oregon 49.5
Pennsylvania 70.0
Rhode Island 51.4
South Carolina 35.2
South Dakota 48.4
Tennessee 39.8
Texas 38.4
Utah 42.9
Vermont 48.9
Virginia 40.8
Washington 55.9
West Virginia 53.0
Wisconsin 51.3
Wyoming 42.4

See also

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References

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  1. ^ a b c "How much gasoline does the United States consume?", U.S. Department of Energy (EIA), March 12, 2015, retrieved June 17, 2015 The EIA publish the Gasoline and Diesel Fuel Update, a weekly price data for U.S. national and regional averages. Cite error: The named reference "EIA_2015" was defined multiple times with different content (see the help page).
  2. ^ a b c "Refiners, retailers drop prices, chase US drivers' demand", New York Times, Marillo, California, 12 April 2015, retrieved 17 June 2015
  3. ^ a b c d e Doan, Lynn; Murtaugh, Dan (17 June 2015), High demand for gasoline has U.S. refiners running near their limits, Bloomberg News, retrieved 15 June 2015
  4. ^ Fueling America: A Snapshot of Key Facts and Figures Retrieved 7 August 2012
  5. ^ Ana Campoy (20 June 2008). "Prices Curtail US Gasoline Use". Wall Street Journal. p. A4.
  6. ^ Clifford Krauss (19 June 2008). "Driving Less, Americans Finally React to Sting of Gas Prices, a Study Says". New York Times. Retrieved 6 January 2013.{{cite news}}: CS1 maint: url-status (link)
  7. ^ "Gas prices hit highest average ever in 2012", CNNMoney, New York, 31 December 2012
  8. ^ "Weekly Retail Gasoline and Diesel Prices". US EIA. Retrieved 6 January 2013.{{cite web}}: CS1 maint: url-status (link)
  9. ^ US Energy Information Administration. "US Product Supplied for Crude Oil and Petroleum Products". Retrieved 25 May 2007.
  10. ^ What do I pay for in a gallon of regular gasoline? US Energy Information Administration. Retrieved 7 August 2012.
  11. ^ a b "How is shale gas produced?" (PDF), US Dept. of Energy, April 2013
  12. ^ Mills, Robin M. (2008). The myth of the oil crisis: overcoming the challenges of depletion, geopolitics, and global warming. Greenwood Publishing Group. pp. 158–159. ISBN 978-0-313-36498-3.
  13. ^ "Supply shock from North American oil rippling through global markets", IEA, International Energy Agency, 14 May 2013, retrieved 28 December 2013
  14. ^ [citation needed]
  15. ^ a b Kliesen, Kevin L. (2006). "Rising Natural Gas Prices And Real Economic Activity". Review (00149187). 88 (6): 511–526.
  16. ^ "/Petroleum Marketing Monthly" (PDF), U.S. Energy Information Administration
  17. ^ "When did the Federal Government begin collecting the gas tax?", US Department of Transportation, Federal Highway Administration
  18. ^ a b "Motor Fuel Taxes" (PDF), American Petroleum Institute, 8 June 2015, retrieved 17 June 2015 Cite error: The named reference "api" was defined multiple times with different content (see the help page).
  19. ^ a b Corning, Howard M. (1956), Dictionary of Oregon History, Binfords & Mort Publishing
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United States

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  • Category:Petroleum economics
  • Category:Commodity markets
  • Category:Pricing
  • Category:Energy economics
  • Category:Automobile costs
  • Category:Economic history


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