- 24 Nov
US EIA Reports Lag Between Fuel Spot Price Change And Fuel Retail Price Change
When consumers hear there is an increase in oil prices, they expect to see an immediate increase in retail fuel prices. Actual fuel price management practices show the increases in retail fuel prices are often two weeks later.
In today’s This Week In Petroleum report published by the US Energy Information Administration, the US EIA documents this lag time between changes in spot fuel prices and retail fuel prices.
The spot price for a fuel commodity reflects the cost of crude oil and other inputs to refiners as well as the costs and profits of processing that crude oil into products. While retail fuel prices do follow changes in spot fuel prices, there is a consistant lag time between when spot fuel prices change and retail fuel prices change. The report shows that on a regional level, 50% of the retail fuel price change happens within two weeks of the spot fuel price change, and 80% of the retail fuel price change happens within four weeks.
The entire report can be found here.