Big Oil Quick to Jack Up Gasoline Prices But Slow to Drop Them: Analysis

Over the past four months, Big Oil has rushed to raise gasoline prices—sometimes charging far more at the pump than the increased cost of oil would warrant—and dawdled to lower them when crude’s valuation declined, according to a new analysis released Monday by the progressive watchdog group Accountable.US.

Accountable.US acknowledges that the cost of oil plays an important role in determining the price of retail gas. But to understand why prices at the pump have outpaced the escalating cost of crude and why, when the cost of crude has fallen temporarily during the last 12 weeks, savings have very slowly—and only partially—been passed on to consumers, the group says look no further than fossil fuel corporations’ desire to maximize profit margins.

When the cost of crude has risen, Big Oil has been quick to lift gas prices.

Sometimes, price hikes at the pump have closely resembled changes in the crude market. For instance, a 3.73% increase in oil spot prices from April 29 to May 6 was mirrored by a 3.34% increase in retail gas prices from May 2 to May 9.

In other cases, price hikes at the pump have exceeded climbing oil costs, such as when a 2.64% uptick in the price of crude from May 27 to June 3 was accompanied by a 5.29% increase in the price of gas from May 30 to June 6.

Meanwhile, when the cost of crude has fallen, Big Oil has been slow to act—if at all—and gas prices have either continued to soar or declined only slightly from one week to the next.

A 1.12% decrease in oil spot prices from April 22 to April 29 was accompanied by a 1.76% increase in retail gas prices from April 25 to May 2. An even more egregious example occurred when the cost of crude declined by 1.58% from May 6 to May 13 and the price of gas surged by 3.68% from May 9 to May 16.

Even when the industry has lowered retail gas prices, it has failed to do so at a rate commensurate with the falling cost of crude.

A 3.3% decline in oil spot prices from June 10 to June 17 yielded a 0.8% decrease in prices at the pump from June 13 to June 20. A week later, a 7.37% decrease in the cost of crude was accompanied by just a 1.72% drop in the price of gas. A 6.89% fall in the cost of oil from July 1 to July 8 was accompanied by a 2.56% decline in gas prices.

Originally published at Commondreams.org.