Since making recent headlines, many people are familiar with the Philadelphia Energy Solution (PES) oil refinery explosion that occurred on Friday, June 21st at approximately 4:00 a.m. in South Philadelphia. The blaze injured five workers that were treated for minor injuries. The explosion caused a 3.5% - 3.9% jump in RBOB prices on the NYMEX due to concern that the outage may constrain supply.
On May 7th we reported the beginning of the end of the spring gasoline price rally. After six weeks of gains on the NYMEX, and summer grade gas specification changes piling on more cost, retailers were unable to pass through daily wholesale price increases.
On April 10th, we had warned the spring price rally along with summer gas specification changes were upon us and soon retail gasoline prices would breach the $3.00 mark. Looking at GasBuddy, retail gas prices today across Pennsylvania $3.00 plus prices are now the norm. Pittsburgh with RFG gasoline leads the state with an average $3.15 per gallon 87 grade pump price.
It is once again that time of year where the sun is shining, temperatures are rising and so is the price of our fuel. Gasoline prices traditionally rise around early part of the year (February – May) but this year the increase was steeper than it traditionally is. Many refinery outages and early transition to summer blends have led the charge in California but, here are some other factors attributing to these increases:
On April 3 2019, Ohio Governor Mike DeWine signed a bill which will increase the gasoline and diesel fuel taxes for the state. Starting on July 1st the state tax on diesel fuel will increase by 19 cents to a total of 47 cents per gallon. The 67% increase will bump Ohio to the 6th highest diesel fuel tax rate behind only California, Pennsylvania, Washington, Indiana, and New Jersey. The tax on gasoline will be increased by 10.5 cents per gallon to a total of 38.5 cents per gallon. Ohio’s gasoline tax will remain lower than Pennsylvania and Indiana, but will be higher than its neighboring states, Kentucky, West Virginia and Michigan.