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GAITHERSBURG, Md. -- More U.S. fuel exports, volatile gas prices and higher gas taxes are among GasBuddy’s "Top 10 Petroleum Points of Controversy for 2014."
In a corporate blog, the company revealed what consumers can expect at the pump in 2014. Here are GasBuddy’s predictions in more detail:
1. Wild Price Swings -- Volatility in the U.S. gasoline market is here to stay. Very uneven crude oil prices and equally uneven regional refining should lead to price gyrations for given localities.
2. Big Spreads Among Retailers in the Same Area -- Gasoline prices promise to be highly variable even within small geographic communities. Several major companies are invested in product differentiation (additives, etc.) as well as loyalty tie-ins with grocers and other merchandisers.
3. U.S. Crude Exports to Foreign Countries -- Watch for a strong lobbying effort focused on lifting the de facto ban on exports of U.S. crude.
4. Shallow Inventories -- U.S. inventories of gasoline and diesel are still very much "just-in-time" stocks with much less product per person in storage than existed 25 to 30 years ago. Refining capability has surged, but markets tied to a few local refineries are still capable of spiking higher when refineries see events.
5. Florida and Other South Atlantic Coast Supply Points Could Face Serious Supply Issues -- Delivery of petroleum between waterborne ports relies on U.S. flagged vessels, in accordance with the Jones Act. Because many more vessels are now required to move crude from port to port in the Gulf Coast, the freight rates for moving gasoline and diesel have skyrocketed.
6. Less Imports of Finished Gasoline and More Exports -- Exports of gasoline are likely to rise, with the U.S. the most vital source of supply for Central and South America as well as some west African and Asian countries. Imports of gasoline should dip to 21st century lows.
7. Midwest Refinery Upgrades Finished -- The last two years have seen major refinery upgrades in the Midwest, and many of those states could see motor fuel prices spend plenty of time below $3 gallon in 2014.
8. Cheap Ethanol Keeps Gasoline Prices at Bay -- Ethanol prices are likely to be significantly lower than gasoline costs in 2014, thanks to bountiful grain harvests. With most of the country using E10 motor fuel, the cheaper ethanol values will put some further downward pressure on gas prices.
9. Diesel Prices Remain Strong -- Wholesale and retail prices for diesel fuel should remain some 30 to 50 cents per gallon higher than gasoline prices in most of the country.
10. The Tax Man Cometh -- The federal motor fuel tax has not seen an increase since October 1993, and an election year does not present a hospitable environment for a higher levy. We will see a number of states and local governments raise fuel taxes, and a more heated debate on the federal excise tax will loom in 2015.
Gaithersburg, Md.-based GasBuddy is a subsidiary of OPIS (Oil Price Information Services).