Fed agency: Idled refineries, global demand drove gas price spike

The Energy Department’s in-house number crunchers say recent gasoline price spikes can’t really be laid at the feet of crude oil prices, which generally play a big role in what drivers pay at the pump.

Instead, a brief Energy Information Administration report Monday explains that several factors, such as refinery outages (both planned and unplanned) and growing global demand for petroleum products, account for most of the rise.

These factors have driven an increase in the difference between crude oil prices and wholesale gasoline prices, which is called the “crack spread.” The EIA says the growing gap accounts for “most” of the roughly 45 cents-per-gallon rise in gasoline prices between Jan. 1 and early last week.

“While these factors have played an important role, other factors, such as preparations for the seasonal switch to summer grade gasoline, may also have contributed to recent short-term movements in wholesale gasoline prices that are reflected in crack spreads,” reports the EIA, which is the Energy Department’s independent statistical arm.

The EIA, which bases its new report on gasoline price increases through early last week, says as much as two-thirds of the 2013 increase in pump prices is reflected in the increased “crack spread.” From their Monday report:

Between January 1 and February 19, the price of Brent crude oil—the waterborne light sweet crude grade that drives the wholesale price of gasoline sold in most U.S. regions—rose about $6 per barrel, or about 15 cents per gallon. A simple calculation, which modestly understates the role of higher crude prices to the extent that crude price increases during December 2012 were still not fully passed through in retail gasoline prices at the start of 2013, suggests that about two-thirds of the rise in gasoline prices since the start of the year reflects higher gasoline crack spreads.

Average nationwide gasoline prices are currently averaging $3.77 per gallon, according to AAA. The newest EIA price data will arrive later on Monday.

Gasoline prices remain well below record levels, but prices are high enough to make the pump costs, which played a big role in election-season attacks, reemerge as a political weapon for Republicans.

GOP officials are again citing pump prices they press for White House approval of the Keystone XL oil sands pipeline, even though critics of the project to expand imports of Canadian oil say it won’t affect gasoline costs.

— Updated at 12:41 p.m.