Tuesday, December 9, 2008

GASOLINE PRICE DROP


Just saw this data from Bloomberg.
Retrieved on 12/09/2008


PETROLEUM (¢/gal)

 PRICE*CHANGE% CHANGETIME
NYMEX HEATING OIL FUTURE149.39.35.2301:52
NYMEX RBOB GASOLINE FUTURE95.38-.80-.8301:10

The futures price of gasoline is less than $1. Most states have fuel taxes of between roughly 30 and 50 cents per gallon. Figure in about 10 cents a gallon for marketing, distribution and profits. 

UPDATE: from API

Some facts:  As of October 1, 2008:

  • The nationwide average tax on gasoline is 48.4 cents per gallon as of October 2008, down 1 cent from July 2008.  
  • The nationwide average tax on motor diesel fuel is 53.6, a decrease of 2.8 cents from the July 2008 study. 



The price of gas is going down, down, down. This is an amazing turn of events from June when prices were spiking at above $4 as a national average.

QUESTIONS FOR DISCUSSION

What are your thoughts?

What price do you think the national average price will ultimately fall to?

What month will the lowest average price occur in?

  

2 comments:

elliotross said...

I think you forgot the key question;

What will be the % increase in the sale of full sized SUV's and trucks in the United States because of the drop.
(Octobers was over 20%)

David Damore said...

Thanks for the comments.

Was looking at it more from the perspective that consumers of gasoline now have a lower cost basis for fuel.

In regards to SUV's and trucks, total market demand for these vehicles has reset to a lower level. Consumers are unable to qualify for loans on these vehicles in the numbers they were just a year ago. HELOC's [Home Equity Line of Credit] are no longer available to homeowners either.

The auto firms are now adjusting production capacity to deal with these new realities. This is a challenging and painful process.