HOUSTON, Aug. 31 (Xinhua) -- The U.S. average retail price for regular gasoline on Monday was 2.83 U.S. dollars per gallon (about 3.8 litters), the highest price on the Monday before Labor Day since 2014, the U.S. Energy Information Administration reported on Friday.
The price on the Monday before Labor Day in 2014 was 3.45 dollars per gallon. The 2018 price was 43 cents per gallon higher than the same time last year.
According to EIA, a higher North Sea Brent crude oil price, which was 18 dollars per barrel higher than the price heading into Labor Day weekend last year and its highest level for this time of year since 2014, is the main driver of the increase in the gasoline price.
Crude oil is the main input cost in the production of gasoline, and movements in the crude oil price, along with changes in gasoline market conditions, drove changes in wholesale and retail gasoline prices. EIA estimated that about two-thirds of the price of gasoline at the pump is attributable to the refinery acquisition cost of crude oil.
Because a barrel of crude oil contains 42 gallons, each dollar per barrel of sustained price change in crude oil and gasoline wholesale margins translates to an average 2.4-cent-per-gallon change in petroleum product prices. When the price of crude oil increases, the price of wholesale gasoline adjusts to reflect the increased refinery input cost, other market factors being equal.
The current higher crude oil price environment has coincided with a period of strong motor gasoline demand, which also puts upward pressure on prices.
