Charts: Japan Regular Gasoline Price Climbed to Record High

Surpassed the last highest price of 185.1 yen/litre

Source : Nikkei and Bloomberg

Chart: Japan Gasoline Prices Approaching 15-year High

The Energy Agency announced on the 16th that the retail price of regular gasoline (national average, as of the 14th) rose 1.6 yen from the previous week to 181.9 yen per liter.

Prices have risen for 13 consecutive weeks since late May.

The highest figure since 1990, when the Energy Agency began collecting statistics, was 185.1 yen in August 2008. The highest price update in about 15 years is imminent.

Source : Nikkei

Gasoline Is Surging All Over the World in Fresh Inflation Blow

Elizabeth Low, Chunzi Xu and Rachel Graham wrote . . . . . . . . .

The price of gasoline is starting to surge everywhere, an inflationary omen for central banks and governments the world over.

Futures just soared to a nine-month high in New York, sending shock waves through to the pump, while prices have also been rising in Asia. Markets for the motor fuel have tightened worldwide due to a combination of unexpected refinery outages plus lower-than-normal stockpiles in key storage hubs such as the US Gulf Coast and Singapore for this time of the year.

In global energy markets, it’s telling that while crude oil futures are little changed year-to-date, US gasoline contracts have rallied by more than 20%. The resurgence in gasoline potentially poses a headache for central banks including the US Federal Reserve as policymakers grapple with the problem of how much more monetary tightening, if any, is needed to bring inflation to heel.

Gasoline prices are often a topic of contention as those costs can be an essential daily expense for many, alongside food and rent. Energy prices are one of the many factors that have contributed to surging inflation globally. In the US, reining in prices at the pump will also be a crucial issue for President Joe Biden with the next election just over a year away, especially after he ordered the sale of a huge chunk of the nation’s strategic petroleum reserve last summer.

“Higher energy costs may push up consumer prices and lead to renewed goods inflation — a sector where price increases have slowed,” said Andrew Hollenhorst, chief US economist at Citigroup Inc.

For perspective, a one-cent rise in a gallon of gasoline in the US takes away about $1.15 billion annualized spending power, according to Brett Ryan, senior economist at Deutsche Bank AG. That means the $1.30 a gallon drop in the second quarter saved consumers $150 billion, and that’s money they could spend on other goods and services. Now, this tailwind could turn into a headwind and drag on spending should prices continue to rise materially, Ryan said.

Global Strength

Low inventories and high demand across key regions are driving prices higher around the world. In Europe, gasoline prices are rising faster than crude, although this trend has yet to fully translate to higher costs at the pump. Meanwhile, conditions in the Singapore market, a key Asian hub, have also firmed on lower-than-expected Chinese exports. In many emerging markets, that translates into a heavier burden for governments given many have fuel subsidies in place to buffer costs for poorer citizens.

Global gasoline supply has failed to recover significantly from historically low levels despite additions of refining capacity in the Middle East and China. Even the US had the biggest expansion in more than a decade, and that’s before another refinery slated to shut by year-end got an unexpected extension.

These expansions haven’t been enough to offset a string of unplanned outages including Exxon Mobil Corp.’s Baton Rouge unit in the US, Shell Plc’s Pernis site in Rotterdam and ENEOS Holdings Inc.’s’ Mizushima facility in Japan. These disruptions tightened supplies at a time when inventories are still low.

Refining systems across the world are more susceptible to outages after running hard for years, according to Callum Bruce, an analyst at Goldman Sachs Group Inc. In addition, a wave of record-breaking heat in Europe and parts of Asia is also making it harder to run lighter crudes, he added.

In China, the largest crude importer, a range of indicators point to buoyant demand. Congestion levels in the 15 cities with the most car registrations have risen by about a quarter compared with January 2021, according to data from Baidu Inc. tracked by BloombergNEF. At the same time, commercial gasoline inventories have been estimated at the lowest since at least 2019.

China’s gasoline demand is forecast at around 3.3 million barrels a day in July, according to estimates by Rystad Energy. That’s 14% higher than in the same month of 2019, the last year before Covid restrictions decimated consumption.

European Quandary

In Europe, gasoline usage has been rebounding too, with France, Germany, Spain and Italy all posting year-on-year increases in consumption. At the same time, the region is still feeling the supply pinch from sanctions on Russia that deprived local refiners of crude and other raw materials for gasoline.

The loss of heavy naphtha from Russia, for example, has led to a dearth of feedstock for gasoline-making units known as reformers. That has led to a squeeze in components that add to the octane rating of gasoline, ultimately squeezing the supply of gasoline that is suitable for European cars, according to Sparta Commodities.

Switching away from Russia’s flagship Urals grade to lighter American crude has led to an excess of light naphtha, which can be blended into gasoline but requires other components such as reformate. This dynamic has further lifted the cost of premium gasoline, which calls for more reformate.

The supply of gasoline has also been constrained by the recent counter-seasonal strengthening in diesel, according to Wood Mackenzie Ltd. That had prompted refiners to boost production of the fuel at the expense of gasoline, said Mark Williams, research director at the consulting firm

Source : BNN Bloomberg

Infographic: Global Gasoline Prices, by Country in 2022

See large image . . . . . .

Source : Visual Capitalist

Chart: How Affordable is Gas in Latin America?

Source : Visual Capitalist

Infographic: What Drives Gasoline Prices in the U.S.?

See large image . . . . . .

Source : Visual Capitalist

US$5 Gas in the U.S.: AAA Says Nationwide Average Hits New High

David Koenig and Julie Walker wrote . . . . . . . . .

The nationwide average price for a gallon of gasoline has hit $5 for the first time ever.

Auto club AAA said the average price on Saturday was a fraction of a penny over $5.00. Motorists in some parts of the country, especially California, are paying far above that.

The national average price has jumped 19 cents in just the past week, and it is up $1.93 from this time last year.

The high cost is taking a toll on people who need their vehicles to earn a living.

It was bad enough for cab driver Joseph Pierre when it cost $25 to fill his tank. Now he shells out $40 or $45.

“I’m losing money because some passengers I pick up, they don’t care about that, they don’t tip you,” Pierre said Saturday as he pumped gas at a BP station in Brooklyn.

Katisha Thompson, who paid $79 for 13 gallons of premium at the same station, said the price is “becoming overbearing.”

“It’s a lot, especially when you are trying to feed a family,” she said. “And it’s not just gas. It’s groceries, everything is going up.”

Americans are still burning less gasoline than they did before the pandemic, with many people still working from home instead of commuting. But there are early signs that higher prices might be affecting drivers’ habits, too.

The amount of fuel consumed last week was down 3% from the previous week and 6% from this time last year, according to preliminary figures from the Oil Price Information Service.

There are several reasons for the surge in gasoline prices.

Americans typically drive more starting around Memorial Day, so demand is up. Global oil prices are rising, compounded by sanctions against Russia, a leading oil producer, because of its war against Ukraine. And there are limits on refining capacity in the United States because some refineries shut down during the pandemic.

Add it all up, and the cost of filling up is draining money from Americans who are facing the highest rate of inflation in 40 years.

California has the highest average price, at $6.43, according to AAA. The lowest average is Mississippi, at $4.52.

While this is the first time breaking the $5 barrier, it’s still not a record when inflation is taken into account. Gas peaked at $4.11 a gallon in July 2008, which would be equal to about $5.40 a gallon today.

Source : AP

Average Cost of Filling Up Car in UK Hits Record 100 Pounds

Sylvia Hui wrote . . . . . . . . .

The average cost of filling up a typical family car has exceeded 100 pounds (US$125) for the first time in Britain, as Russia’s war in Ukraine drives gasoline prices higher.

Figures from data firm Experian Catalist showed that the average price of a liter of gas at U.K. pumps hit a record 182.3 pence ($2.3) on Wednesday, taking the average cost of filling a 55-liter (14.5-U.S. gallon) family car to 100.27 pounds. The prices are the equivalent of about $8.8 per gallon.

Motoring association AA said the price hikes have been a “huge shock” for drivers and urged the government to intervene.

“Enough is enough. The government must act urgently to reduce the record fuel prices which are crippling the lives of those on lower incomes, rural areas and businesses,” AA President Edmund King said.

“The 100-pound tank is not sustainable with the general cost-of-living crisis, so the underlying issues need to be addressed urgently,” King said.

Russia’s invasion of Ukraine led to concern about oil and gas supplies and worsened soaring energy prices, trickling down to customers filling up at the pump. High gasoline prices have hit people across Europe and in the United States, prompting governments to pass measures to try to ease the pain.

The British government in March announced a fuel tax cut of 5 pence per liter to help drivers after record jumps in pump prices.

Many motorists argue the tax cut reduced the cost of filling up a car by only a tiny amount. There are also growing concerns that fuel retailers are not passing on the tax cut to customers.

Prime Minister Boris Johnson’s government is facing heavy pressure to do more to help Britons struggling with fuel and food prices and domestic energy bills amid a severe cost-of-living crisis.

Johnson’s spokesman said Wednesday that soaring fuel prices were “hugely concerning,” and the government wants to make sure companies are passing the tax cut on to consumers.

“It is important the public understand what actions each of the fuel retailers are taking, and so we are considering what further options we can take in this area,” he said.

Source : AP

Charts: Typical U.S. Household Have to Spend 70% more on Gasoline This Year Over Last Year

Estimated US$4,800 in 2022, a $2,000 increase over last year

Hefty financial burden is piling up even more for the working poor in other countries

Source : Bloomberg

Charts: U.S. Gasoline and Diesel Hit Highest Recorded Average Price

Source : Bloomberg

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Relentless Price Hikes Send U.S. Gasoline Price To Fresh Record High . . . . .