March 23, 2022

U.S. gasoline and diesel prices declined slightly the week after their March 14 peak

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On March 21, the U.S. regular retail gasoline price across all formulations (conventional and reformulated) averaged $4.24 per gallon (gal), and the U.S. on-highway retail diesel fuel price averaged $5.13/gal. Retail gasoline prices peaked in our weekly data on March 14 at $4.32/gal, a 22% increase from $3.53 per gallon on February 21. During the same three-week period, the average U.S. on-highway retail diesel fuel price increased 29% from $4.06/gal to $5.25/gal. Retail gasoline and diesel fuel prices have never increased so quickly on a percentage basis over a three-week period in our data (which for gasoline dates back to August 1990 and for diesel dates back to March 1994).

We publish weekly updates to retail prices every Monday in our Gasoline and Diesel Fuel Update. The prices we publish are nominal, meaning the data reflect the prices at the pump at the time of the transaction. To compare prices across time periods, a price index such as the Consumer Price Index (CPI) produced by the U.S. Bureau of Labor Statistics is a common tool for adjusting the nominal price level to account for inflation. The adjusted nominal price that accounts for inflation is called the real price.

The average U.S. regular retail gasoline price for the first three weeks of March 2022 was $4.22/gal. After adjusting historical prices using the CPI, this price in real terms is lower than the all-time high of $5.27/gal in June 2008 (using March 2022 dollars). The real price adjusts the nominal June 2008 price of $4.05/gal for 14 years of inflation. Likewise, the average U.S. on-highway retail diesel fuel price for the first three weeks of March was $5.08/gal, which is $1.01/gal less than the average June 2008 price in real terms.

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Retail diesel fuel prices averaged more than $5.00/gal in every region but the Rocky Mountain region on March 14, but on March 21, only the East Coast and West Coast average retail diesel prices remained above $5.00/gal. In California, retail on-highway diesel fuel prices surpassed $5.00/gal on February 21 before increasing to $5.76/gal on March 7 and to $6.22/gal on March 21.

Since Russia’s further invasion of Ukraine began on February 24, increases in retail gasoline and diesel prices are mostly due to increasing crude oil prices. Crude oil prices make up an estimated 61% of the total cost of producing gasoline and 53% of the total cost of producing diesel fuel as of February 2022.

Principal contributors: Jimmy Troderman, Alex DeKeyserling