You may have noticed that oil and wholesale gasoline prices fell Wednesday morning, which is good news. But rising pump prices may seem confusing.
There is a way to understand it. As with other pricing swings over the last several weeks, the latest changes are being attributed to the war involving Iran.
According to Patrick De Haan, head of petroleum analysis at GasBuddy, crude oil was down 11% Wednesday morning and the wholesale price of gasoline was down 8%, yet the national average for gasoline was $4.54.
Tuesday’s national average was $4.48, and a week ago the national average was $4.22, according to AAA.
To keep it simple, the gasoline with the higher wholesale price, made with more expensive oil, is probably still at your local gas station and, in some situations, still moving through refineries and ethanol plants. Higher-cost gasoline in the supply chain means higher prices at the pump. That helps explain why prices were rising Wednesday in places such as St. Louis, Dallas, Austin and across Virginia, De Haan said.
De Haan said prices in St. Louis and Virginia were climbing to about $4.39 per gallon. Gas stations across the St. Louis region in Missouri were displaying $4.19 per gallon. Across the Mississippi River in Illinois, gas prices have jumped 35 cents.
When lower oil and wholesale gasoline prices make their way through the supply chain, pump prices should dip, though it is difficult to predict by how much.
Regarding diesel fuel, De Haan also noted that 44 of the 50 states saw a rise in diesel prices compared to last Wednesday; Michigan saw a rise of 87 cents per gallon, Illinois 70 cents and Missouri 48 cents.