Fuels Expert: Supply Is a Big Concern in Asia

By Jeff Lenard

As U.S. drivers face rising gas prices that are now at $3.96 per gallon, other countries are facing significant supply issues along with the higher prices, noted Denton Cinquegrana, OPIS chief oil analyst, in the latest Convenience Matters podcast.

“The United States is mostly insulated on supply. The problem is that Asia is not,” Cinquegrana said.

Cinquegrana also said that several countries, including Sri Lanka and Pakistan, have gone to four-day work weeks.

“I wouldn’t be surprised if more developed countries in Asia, like Japan or South Korea, follow suit or encourage companies to let their employees work from home,” he said.

Meanwhile, on Friday, the International Energy Agency (IEA) announced a 10-point set of demand-side actions that governments, businesses and households can take to alleviate the economic impacts on consumers from the disruptions to oil markets stemming from the war in the Middle East. Topping the list was “work from home where possible,” which “reduces fuel demand for commuting.”

The impact of the war will be felt well after it ends, Cinquegrana said. “Some countries had to close down oil production facilities and production wells so fast that they did permanent damage to the wells that will reduce output if and when they are reopened.”

State governments are also looking for ways to give consumers relief from rising gas prices. Last week, the Georgia Senate suspended the approximately 33.3-cent state gas tax, according to WRDW. The bill, which was passed by the Georgia House on Wednesday, is expected to be signed by Governor Brian Kemp. If signed, the bill would suspend the state gas tax for 60 days.

Cinquegrana is a featured speaker in the session “Fuel Deep Dive with OPIS” at the April 14–16 NACS State of the Industry Summit, the industry’s only event where convenience retailers gain access to the newest industry metrics and insights.

NACS has been active in communicating the industry’s voice related to current gas prices.

Here are a few backgrounders on fuels that may be of interest to share online or with consumers concerned about gas prices:

• What goes into gas prices (during normal times): Factors That Affect Gas Prices
• Who sells gas in the U.S. (there are probably about 150,000 fueling stations and 122,000 of them are convenience stores): Convenience Stores Sell the Most Gas
• A short blog written at the beginning of the current price spike: What Happens to Gas Prices When Oil Prices Rise?
• An explanation of the broader spring transition: Seasonal Gas Prices Explained
• Finally, while there are some tactics that the Trump Administration is pursuing to address higher prices, history has shown that the president doesn’t have much ability to lower prices at the pump: Does the President Control Gas Prices?

A complete listing of fuels-related resources is in the NACS Fuels Resource Center.