By Laura Sanicola

(Reuters] – While U.S. gasoline prices are down in time for holiday driving season, not everyone is experiencing the same relief at home.

U.S. Inflation rose to unprecedented levels in October due to fuel prices. President Joe Biden was less popular and there were calls for an investigation into any possible manipulation of the fuel markets. America is the most important consumer of gasoline globally, with more than 100 millions Americans expected to travel this holiday season.

The average price for gasoline in the United States has fallen since its peak of $3.42 per gallon. It is now at $3.31, down 11c. Although November’s peak wasn’t an all-time record for gasoline retail prices, the 60% rise in the coronavirus-affected lows was alarming.

Prices have fallen faster in some areas than elsewhere. This is partly due to states such as California requiring additional ingredients, geographical isolation from supply and severe weather that prevented delivery to the Pacific Northwest.

The average retail price in Michigan and Indiana is down by more than 25c. A gallon gasoline costs $3.152 per gallon in Michigan right now, which is 23 cents less than a month ago.

Patrick DeHaan (head of Petroleum Fuel Analysis at GasBuddy), spoke about Michigan prices.

Prices have not moved on the west coast where supplies to U.S. oil refineries were affected by historical flooding in British Columbia.

Last week, the average gasoline price in California was $4.67 per gallon. This is only 2 cents less than a month earlier. It was just one cent less than last month in Oregon at $3.774 per gallon.

Oil prices have fallen more than 50%, which is the main reason that gasoline prices are falling.

Crude oil prices have risen by about half compared to last year. This is because demand has increased while supply has been slow to rebound. The benchmark price has fallen to $73 per barrel since peaking at $86/barrel, a 15% drop.

This is due to U.S. strategic reserves being released to lower prices and to forecast more supply over the next months. Also, there’s uncertainty around demand related to Omicron Omicron coronavirus.

On several occasions, the Biden administration raised concern about the gap between prices at the pump and wholesale costs. This gap was significantly larger than the 5-year average of 85cs in November and reached $1.14 last month. It had fallen to 93cs as of last week.

STATION OWNERS STICK OVER PRICES

Sources in the gasoline industry say that because of volatility, filling stations owners are wary about lowering their prices. They’d have to increase later.

Prices can vary greatly in different states. Sal Risalvato, the executive director of New Jersey’s Gasoline, C-Store and Automotive Association, stated that not all retailers adjusted their prices when wholesale gasoline prices fell.

Some members of associations were worried about the lower gasoline prices, possibly exposing them for losses. New Jersey’s average gasoline cost was $3.413 last week. That is 4 cents more than it was a month earlier.

He said that some of the station’s employees might have suffered losses up to $2,400.

Prices may fall further due to surging consumer demand which is higher than pre-pandemic. AAA projects that over 100 million Americans will use the roads this holiday season, a 28% increase on 2020’s COVID affected period.

Matt Smith from Kpler, lead oil analyst said that while gasoline prices may continue to fall in theory, “I don’t think there will be a 25-cent drop.” (Graphic: Gasoline prices drop in most states, but declines vary, https://fingfx.thomsonreuters.com/gfx/ce/klvyknrynvg/Pasted%20image%201639759200177.png)