How much will gas cost in 3 months?

This question is actually fairly easy to answer. If we look at wholesale gasoline futures prices, we can see with pretty good accuracy what wholesale gasoline will cost in a month or two. It takes a couple of weeks (or longer) for wholesale gasoline to make it to your local gas station, so that we can look out and see mid summer gasoline prices today.

Take a look at Bloomberg’s Energy Prices page, and you’ll see that NYMEX gasoline futures are trading at just under 3 dollars (297 cents) as of April 18th, 2008.

On average, federal and state governments add another 47 cents in taxes to this figure. The federal government adds 18.4 cents in taxes, and each state’s total gas tax is listed here.

Gasoline storage, distribution, marketing, and retail markup add a bit more than 10%, or 30-35 cents to the final price.

All told, that means that $3.80 regular unleaded is on the way for the summer in low tax states, with gas just over $4 in California, Nevada, and other states with higher gas taxes.

But don’t think I’d have it any other way – just as in the late 70’s, high gas prices will be Americans’ best incentive to ditch their gas guzzlers and start conserving.

3 thoughts on “How much will gas cost in 3 months?

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