California motorists bludgeoned by the nation’s second highest average retail gasoline prices may finally see some relief in the coming days.
That’s because the price for the nation’s most expensive raw or unfinished gasoline, known as Carbob, has plummeted from its February highs, according to Tom Kloza, chief oil analyst for the Oil Price Information Service.
Carbob is an acronym for a tongue-twisting mouthful: California Reformulated Gasoline Blendstock for Oxygenate Blending.
Overnight, the Carbob price fell 17 cents to $3.24 a gallon Wednesday. That’s down 51 cents from the $3.75 recorded Feb. 24.
This is considered important because although most gasoline is sold under long-term contracts and not on the wholesale market, such trades are a good indication of where prices are headed.
After adding about 60 cents to 70 cents of taxes and other costs, Wednesday’s wholesale price translates into a retail price at service stations of about $3.84 to $3.94 for a gallon of regular gasoline. Of course, that’s hardly inexpensive, but the downward trend at wholesale may indicate that retail prices in the state have peaked, for now.
“California is often the first market in the country to peak,” said Kloza, “and the trend spreads from West to East. We’re still looking at more increases in prices in states east of the Rockies, but this is a notable development that should eliminate the insane predictions of $5-a-gallon gasoline.”
One unanswered question will be what happens in the eastern U.S., where a number of refinery closings have tightened supply considerably.
California’s retail prices were still rising slightly Wednesday, up 0.2 cents a gallon overnight to an average of $4.363 for a gallon of regular gasoline, according to the AAA Daily Fuel Gauge Report. That’s 40.1 cents a gallon higher than a year earlier.
Nationally, the average climbed 0.6 cents overnight to $3.811. A year earlier, the national average was $3.556 a gallon. Hawaii’s gasoline is the most expensive at an average $4.439 a gallon.