U.S. retail gasoline prices rose in summer but ended 2022 lower than start of 2022
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Note: Retail prices are in nominal terms and are not adjusted for inflation.
Rising crude oil prices and increased gasoline demand early in 2022 contributed to rising U.S. retail gasoline prices in the summer, but gasoline prices ended 2022 lower than at the start of the year because of more refinery production and less demand during the second half of the year.
The average U.S. retail price for regular-grade gasoline, the price consumers pay at the pump, averaged $3.95 per gallon (gal) in 2022. The price hit its 2022 high at $5.01/gal in June 2022, before decreasing to $3.09/gal at the end of the year. At its height in mid-June, the U.S. average retail gasoline price was the highest gasoline price since 2012, when adjusted for inflation. Although the retail gasoline price increased significantly during the middle of the year and remained elevated through the end of the summer, the U.S. average retail gasoline price ended the year $0.19/gal lower than in the first week of 2022.
The average U.S. retail gasoline price began the year at $3.28/gal. The average price surpassed $4.00/gal on March 7. Russia’s full-scale invasion of Ukraine in late February contributed to rising crude oil prices and substantial uncertainty in markets for crude oil, natural gas, and petroleum products such as gasoline.
Increased gasoline prices in the first half of the year were driven by low gasoline inventories, which declined sharply in March and April and remained below average through November. The decrease in inventories reflected relatively low refinery utilization in the spring, particularly when compared with pre-pandemic levels. High gasoline prices likely reduced gasoline consumption. Since the summer, gasoline consumption (measured as product supplied) was less in 2022 than it was in 2021. Increased refinery production since the summer of 2022, along with less consumption, reduced gasoline prices in the second half of the year.
U.S. gasoline prices vary regionally, reflecting local supply and demand conditions and differences in state fuel specifications and taxes. The annual average retail price for regular-grade gasoline in 2022 ranged from a low of $3.52/gal on the U.S. Gulf Coast to a high of $4.95/gal on the West Coast.
In 2022, from January 3 to December 30 retail gasoline prices decreased by $0.17/gal on the East Coast, $0.13/gal in the Midwest, $0.26/gal on the Gulf Coast, and $0.23/gal on the West Coast. Although gasoline prices in all regions were highest during the summer, West Coast gasoline prices had a second increase in October related to lower refinery utilization.
Principal contributor: Kevin Hack