The nationwide price of self-service regular gasoline in mid-March was about $3.83 a gallon, including taxes. That’s up about 26 cents a gallon from the same time last year. The U.S. Energy Information Administration (EIA) expects the regular grade gasoline retail price to average $3.79 per gallon for all of 2012. 

Oil Prices. Crude oil is refined to make gasoline and, therefore, its price directly impacts the price of gasoline. When crude oil costs rise, gasoline prices typically follow. Crude oil costs for U.S. refineries are expected to average about $116 per barrel this month, which is $14 higher than a year ago. The EIA forecasts that the average crude oil cost for domestic refiners will average about $115 for all of 2012.

Global Economic and Political Forces. Oil is a major commodity in the global economy, with its price pushed and pulled by economic and political events occurring all around the world. Today, the burgeoning economies of China, India, Brazil and several Middle Eastern countries are consuming oil like never before, putting upward pressure on oil prices. Political events and uncertainty, such as civil unrest in oil exporter Nigeria, the embargo on Iranian oil sales and turbulence in other Middle Eastern countries are currently pushing oil prices.

Seasonal Factors. Every spring, refineries are retooled for the production of summer gasoline blends designed to keep emission low. This changeover temporarily tightens gasoline supplies, which can affect prices. During the April-September period when driving is heaviest, the EIA forecasts that prices will average about $3.92 per gallon, with a peak monthly average price of $3.96 per gallon in May

World Oil Consumption. The U.S. accounts for about 18 percent of the world’s oil consumption and its oil use has remained about the same for the last several years. Gasoline demand has declined modestly as fuel efficiency of new vehicles has improved and the lagging economy has affected driving. Oil use elsewhere continues to rise, however, and the EIA expects that world crude oil and liquid fuels consumption will accelerate from 87.9 million barrels per day (bbl/d) in 2011 to 89 million bbl/d in this year. Demand is expected to reach 90.3 million bbl/d in 2013.