U.S. retail gasoline dropped below $2 a gallon for the first time since March 2016, before President Trump was elected. The average pump price fell to $1.99 per gallon Friday, retail tracker GasBuddy said. The nation followed Texas and upper-Midwest states that went under the $2 threshold earlier in March. The decline comes as coronavirus-related lockdowns halt transit across the country and as Saudi Arabia’s price war with Russia has fueled a global glut of both crude and refined products.
Gasoline pump prices followed futures lower. The Nymex April RBOB contract last week fell under 50 cents a gallon — the price before retail markup, blending costs and taxes — leaving wholesale value comparable to the price of a U.S. postage stamp. ”This is the first time in history that we have seen a big reduction in gas prices without a corresponding increase in demand,” said Nancy McGuckin, a travel behavior consultant in Southern California.
The pain is acute for U.S. refiners who are confronted with negative refining margins and are being forced to throttle back operations.