Fuel Industry FAQ
Plain answers to the questions that come up most about fuel prices, data releases, taxes, and the benchmarks behind them. For the live numbers, see the fuel data desk.
Fuel prices
Why don't pump prices fall when crude oil drops?
The pump price is more than crude. It also carries refining margins, distribution and freight, the retailer's margin, and federal plus state taxes. Those layers do not move with every swing in a crude quote, so retail diesel and gasoline lag crude both up and down.
What is the difference between wholesale and retail fuel prices?
Wholesale (the rack or futures price, such as ULSD for diesel or RBOB for gasoline) is what a distributor pays. Retail is the pump price, which adds distribution, the retailer's margin, and taxes. The gap between the two is where jobbers and c-stores make their money.
Why are diesel and gasoline prices different?
They are made in different proportions from a barrel, taxed at different rates (federal diesel is 24.4 cents per gallon versus 18.4 for gasoline), and follow different demand cycles. Diesel tracks freight and industrial activity; gasoline tracks driving season.
What is the 3:2:1 crack spread?
It is a proxy for a refiner's gross margin: the value of two barrels of gasoline plus one of diesel, minus the cost of three barrels of crude, in dollars per barrel. A wide spread encourages refiners to run hard, supporting fuel supply; a thin one can lead to run cuts.
Data releases and timing
When does the EIA release retail diesel and gasoline prices?
Weekly, on Monday afternoon (Tuesday after a Monday holiday). The figures reflect a survey of retail outlets taken that Monday.
When is the EIA Weekly Petroleum Status Report published?
Wednesday morning (Thursday in a holiday week). It covers crude, gasoline, and distillate stocks plus refinery utilization, for the week ending the prior Friday.
When is the natural gas storage report released?
Thursday, by the EIA. It reports working gas in underground storage in billion cubic feet.
When is the Baker Hughes rig count released?
Friday (Thursday in a holiday week). It reports the number of active U.S. drilling rigs, split into oil and gas.
Fuel taxes
What is the federal fuel tax?
18.4 cents per gallon on gasoline and 24.4 cents per gallon on diesel. Both rates have been unchanged since 1993.
Which state has the highest fuel tax?
It shifts as states adjust rates, but California, Pennsylvania, and Illinois are consistently among the highest. Several states also index their rate to inflation, so it rises over time.
Are fuel taxes a percentage of the price?
No. Federal and most state fuel excise taxes are a fixed amount per gallon, so they do not rise and fall with the fuel price the way a sales tax would. A few states add a sales tax on top of the per-gallon excise.
Definitions
What is the difference between WTI and Brent crude?
WTI (West Texas Intermediate) is the U.S. benchmark crude, priced at Cushing, Oklahoma. Brent is the international benchmark, priced from North Sea crude. The Brent-WTI spread reflects global versus U.S. supply and demand.
What is RBOB?
RBOB (Reformulated Blendstock for Oxygenate Blending) is the wholesale gasoline futures contract, priced in dollars per gallon. Retail gasoline tracks it with a lag.
What is ULSD?
ULSD (ultra-low-sulfur diesel) is the wholesale diesel futures contract, the same instrument as the NYMEX heating-oil future. It is the benchmark underneath the rack price a jobber pays.
What is a PADD?
A Petroleum Administration for Defense District is one of five EIA regions used to report U.S. fuel data: PADD 1 East Coast, PADD 2 Midwest, PADD 3 Gulf Coast, PADD 4 Rocky Mountain, and PADD 5 West Coast.
How many gallons are in a barrel of oil?
A barrel is 42 U.S. gallons. Refining a barrel of crude yields roughly 45 gallons of products because the process adds volume.