May 6, 2025 - Business
Where gas is really just $1.98 a gallon
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Last week, President Trump triumphantly announced, "Gasoline just broke $1.98 a Gallon, lowest in years," even as the average price at the pump was $3.18.
Why it matters: Gasoline did touch $1.98 briefly in April, but not at any gas station in the country.
- The wholesale price of gasoline, known as the Reformulated Gasoline Blendstock for Oxygen Blending, or RBOB, is traded on the New York Mercantile Exchange and has occasionally touched that level.
How it works: Once the RBOB lands at New York Harbor, it then needs to be blended with ethanol and transported to gas stations before it can be pumped into vehicles.
- So the price for drivers is usually over a dollar above the wholesale price.
The bottom line: Gas is the most salient price in the economy, and it is almost impossible to take a car journey in the nation without seeing it multiple times.
- As a result, Americans are fully aware that $1.98 gas is not a thing that exists, at least outside wholesale markets.
