Tracking gas prices, from crude oil to the pump

What goes into a gallon

The EIA splits the US retail price of regular gasoline and of diesel into four parts and publishes the breakdown every month:

• Crude oil, the largest share. It follows benchmarks such as WTI and Brent, and its share changes over time and by region.
• Refining costs and profits, which swing with refinery outages, maintenance seasons and fuel demand. The gap between fuel prices and crude prices is often called the crack spread.
• Distribution and marketing: pipelines, terminals, trucks and the station's own margin.
• Taxes: a federal excise tax of 18.4 cents a gallon on gasoline and 24.4 cents on diesel, rates unchanged since 1993, plus state and local taxes that differ widely from one state to the next.

Because crude is only part of the price, a 10% move in oil produces a smaller percentage move at the pump. Outside the US the same logic holds, but fuel taxes are often a much larger share of the price, which dampens the effect of crude even further.

How fast pump prices follow oil

Wholesale gasoline and diesel prices react to crude within hours, because they trade as futures on the same exchanges. Retail prices take longer. Stations sell fuel they have already bought, watch their competitors before changing the sign, and take deliveries every few days, so a move in crude usually takes days to weeks to show up at the pump.

The pass-through is uneven, too. Studies of US fuel markets have repeatedly found that retail prices rise quickly when costs go up and drift down more slowly when costs fall, a pattern economists call "rockets and feathers". A sharp drop in crude therefore tends to be felt later than a sharp rise.

Why prices change when oil doesn't

• Seasonal blends. In summer, US stations must sell lower-volatility gasoline to limit smog. It costs more to make, and the changeover in spring tends to lift prices. The EPA's summer season for retail stations runs from June 1 to September 15.
• Refinery trouble. Outages, planned maintenance and hurricanes along the Gulf Coast can tighten the supply of finished fuel while crude barely moves.
• Regional supply. Some regions rely on a handful of refineries or pipelines and require their own fuel blends, so a local problem can lift prices there with little effect on the national average.
• Diesel's own market. Diesel competes with heating oil and jet fuel for the same part of the barrel and carries the higher federal tax. Winter heating demand and tight global stocks of distillates can push diesel up while gasoline holds steady.
• Exchange rates. Outside the US, crude is bought in dollars, so a weaker local currency raises fuel costs even when the dollar price of oil is unchanged.

What Oil Prices Live tracks for fuel

The app doesn't list prices at individual stations; for the cheapest pump near you, a station-finder app or your fuel retailer's app is the right tool. What Oil Prices Live tracks is the market behind those prices:

• US Retail Gasoline and US Retail Diesel: the EIA's weekly national averages for regular gasoline and on-highway diesel.
• Gasoline futures: the NYMEX RBOB contract, the main wholesale gasoline benchmark in the US, updated through the trading day.
• Gulf Coast jet fuel and Mont Belvieu propane, as daily spot prices.
• Ethanol futures, relevant because most US gasoline is sold blended with ethanol, and natural gas.
• WTI and Brent, the crude benchmarks, which are free. Everything else on this list is part of Pro.

Fuel prices appear per gallon in US dollars, and per liter if you switch to one of the app's 29 other currencies. With Pro you can also set a price alert on any of them, for example on the weekly diesel average or on gasoline futures. To compare the two crude benchmarks behind US fuel, see Brent vs WTI.