A gallon of regular gasoline costs over 40% more than a year ago as U.S. drivers head into Easter weekend, with prices at the pump unlikely to see a significant decline anytime soon after a 9% climb in oil prices in the past week.
Late Friday morning, the national average for regular unleaded gasoline was at $4.10 a gallon, up $1.238 from a year ago, according to GasBuddy. Compared with a month ago, however, prices are down by 21.5 cents.
The Biden administration announced measures in recent weeks aimed at lowering the high cost of gasoline for drivers, who paid a record high nominal price of $4.353 a gallon on March 11. Prices have fallen since then but on Friday, they’re at the highest average on record for this date, April 15, according to GasBuddy.
The U.S. government on March 31 said it would release of 1 million barrels of oil per day for a period of six months from the nation’s Strategic Petroleum Reserve (SPR) for a total of 180 million barrels.
In the days following the announcement, the International Energy Agency said its member nations would also join in, releasing another 60 million barrels to take the total release from global emergency reserves to 240 million barrels.
And earlier this week, the Biden administration said it will allow the summertime sale of gasoline with 15% ethanol, which could provide savings of 10 cents per gallon on average, according to the White House. Normally, between June 1 and Sept. 15, only a 10% ethanol blend can be sold due to current regulations.
However, the release of oil from the SPR, as well as plans to allow more ethanol in gasoline this summer is “not going to make any difference,” Patrick De Haan, head of petroleum analysis at GasBuddy, told MarketWatch earlier this week. E15 is already available and while it’s going to make a “cheaper replacement” for E10, it’s “not going to move the needle in terms of overall prices,” he said.
Even if oil falls back to the prices levels seen before the Russian invasion of Ukraine, it would take some time for retail gasoline prices to follow suit, said De Haan.
For now, oil prices remain well above their levels from Feb. 23, the day before Russia launched a full-scale invasion of Ukraine. On Thursday, the last trading day of the week before Good Friday when most financial markets are shut, U.S. crude benchmark West Texas Intermediate crude CL.1, +2.19% CLK22, +2.19% settled at $106.95 a barrel, while global benchmark Brent crude BRN00, -0.04% BRNM22, -0.04% settled at $111.70. Based on the front-month contracts, WTI ended at $92.10 and Brent at $96.84 on Feb. 23, FactSet data show.
If oil prices fall back to pre-invasion levels, it may take “somewhere in the neighborhood of two weeks” for gasoline prices to fall to levels seen before the invasion, said De Haan. Regular gasoline prices averaged $3.552 a gallon the day before the invasion, according to GasBuddy data.
As of April 11, gasoline prices were down a third consecutive week, the data show. However, oil prices have rallied more recently, with WTI and Brent up by nearly 9% this past week, so the declines for gasoline prices may soon come to an end in the next week or two, De Haan told MarketWatch on Friday.
Gas prices “could head higher yet” before Memorial Day if the European Union pursues a ban on Russian oil, he said. The New York Times reported Thursday that European Union officials were drafting a ban on oil imports from Russia.
The “one constant in the last month has been oil price volatility, and that could eventually bring [gasoline prices] back up,” said De Haan.