Attachment 19 -MLR article From the barrel to the pump: the impact of the COVID-19 pandemic on prices for petroleum products

October 2020

From the barrel to the pump: the impact of the
COVID-19 pandemic on prices for petroleum
products
This article details price movements for petroleum products
in the context of the coronavirus disease 2019 (COVID-19)
pandemic. The pandemic affected energy prices for
products ranging from crude oil to various refined petroleum
products, such as heating oil, jet fuel, diesel fuel, retail
gasoline, and gasoline at the pump. The onset of the
pandemic led to an initial drop in prices for petroleumbased products, and then, just as abruptly, prices rose
sharply as producers limited production and demand
increased.
On January 7, 2020, officials in China announced that they
region.1

had identified a new virus in the Hubei
By the end
of the month, the virus, designated coronavirus disease
2019 (COVID-19), had spread to other countries in Asia. In
February, cases were reported throughout Europe and the
United States, prompting the World Health Organization to
declare a global emergency. On March 3, the United States

Kevin M. Camp
[email protected]
Kevin M. Camp is an economist in the Office of
Prices and Living Conditions, U.S. Bureau of
Labor Statistics.
David Mead
[email protected]

followed suit by declaring a national emergency, a move
David Mead is a supervisory economist in the
Office of Prices and Living Conditions, U.S.
Bureau of Labor Statistics.

that resulted in lockdowns across the country.
As economic activity slowed sharply across the globe,
demand for petroleum and petroleum products plummeted.
The drop in demand, coupled with an unexpected increase

Stephen B. Reed
[email protected]

in supply, led to a collapse in crude oil prices and
subsequent impacts on prices for refined petroleum
products and other downstream items, notably gasoline. As

Stephen B. Reed is an economist in the Office of
Prices and Living Conditions, U.S. Bureau of
Labor Statistics.

economies reopened, the initial price downturn gave way to
Christopher Sitter
[email protected]

reduced oil production and some renewed demand. As a
result, prices for oil products partially recovered.

Crude petroleum prices

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This section discusses how the U.S. Bureau of Labor
Statistics (BLS) measures crude oil prices and how these
prices have changed over the course of the COVID-19
pandemic.

Christopher Sitter is an economist in the Office of
Prices and Living Conditions, U.S. Bureau of
Labor Statistics.
Derek Wasilewski
[email protected]

BLS measures of crude oil prices

Derek Wasilewski is an economist in the Office of
Prices and Living Conditions, U.S. Bureau of
Labor Statistics.

The Producer Price Index (PPI) measures the average
monthly change in selling prices received by domestic
producers of goods and services. The Import Price Index
measures the average monthly change in prices of foreign
goods purchased by domestic consumers and producers.

For crude oil, the Producer Price Index measures the change in prices that U.S. crude oil producers receive from
purchasers, and the Import Price Index measures the change in prices that U.S. purchasers pay for crude oil
imported into the United States. The calculation of the PPI for crude petroleum is based on monthly price data from
a sample of petroleum producers in the United States and uses a midmonth reference period. BLS revises the
producer price data 4 months after their initial publication. Unlike the PPI for crude petroleum, which is calculated
with data for domestic prices, the Import Price Index for crude petroleum is calculated with data from two U.S.
Energy Information Administration (EIA) sources. The first source is the EIA Monthly Foreign Crude Oil Acquisition
Report (EIA-856), which is a listing of the price and quantity of crude oil involved in nearly all import transactions in
a given month. BLS uses these data to calculate a weighted average of import prices throughout the month, and
this average is then compared with the average for the previous month. For the month of initial data publication
and the previous month, BLS calculates a preliminary import index measure, because not all import transactions
data are available. BLS supplements the data by estimating regression models, which use information from the
preliminary EIA-856 report and EIA weekly crude oil average contract values weighted by estimated import
volumes. BLS revises import prices in each of the first 3 months after initial publication.2

The sharp drop in prices: COVID-19 and a price war
In January 2020, after seeing a customary decline due to business shutdowns for the Chinese New Year
celebration, oil demand from China continued to fall because of economy-wide pandemic-related closures.
Demand for oil decreased by 3 million barrels per day, which represents approximately 20 percent of the country’s 
overall oil consumption.3 In February, China’s Purchasing Managers’ Index fell nearly 49 percent, reaching its 
lowest level since it was first measured in 2005. Given that China overtook the United States as the world’s top oil 
importer in 2016, the sudden decrease was the largest demand-side shock to the market since the 2008–09 global 
recession.4 In January, BLS producer and import oil price measures declined modestly, by 2.5 and 0.3 percent,
respectively. Price declines continued in February, with producer prices for crude petroleum falling 14.3 percent
and import prices declining 10.9 percent.
As the COVID-19 pandemic continued to spread across the world, Saudi Arabia, the world’s second-largest oil 
producer behind the United States, urged fellow Organization of the Petroleum Exporting Countries (OPEC)
members and Russia to cut production.5 Having formed a 2016 alliance with OPEC to control the price of oil
through production cuts, Russia, the world’s third-largest oil producer, now resisted the call for further reductions in 

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response to the pandemic. Russia sought to gain market share in anticipation that the U.S. shale industry’s 
profitability and output would fall in the face of lower prices.6
On March 5 and 6, 2020, OPEC and Russia met in Vienna in an effort to iron out their differences. On the OPEC
side, Saudi Arabia was upset that Russia had not previously met production cut agreements, causing the Kingdom
to assume a disproportionate share of the cuts.7 At the meeting, OPEC members threatened to cancel cuts
altogether unless Russia agreed to reduce production by a further 1.5 million barrels per day. Despite ending on a
hopeful note, the meeting did not produce results; Saudi Arabia and fellow OPEC members Iraq and the United
Arab Emirates began reversing production cuts.
By the beginning of April, OPEC had raised output by 1.7 million barrels per day, up to a level of 30.4 million
barrels per day, the largest production jump since September 1990. According to Bloomberg, Saudi Arabia alone
reached a record production of 12.3 million barrels per day on April 1, an output exceeding the pre-pandemic
consumption levels of Japan, Germany, France, the United Kingdom, Italy, and Spain combined.8 The production
boom coincided with an International Energy Agency (IEA) estimate that global demand for oil was down by almost
30 million barrels per day because of the shutdowns in response to the COVID-19 pandemic.9 With demand down,
the addition of petroleum to an already saturated market led to a near-record level of 535.2 million barrels of crude
petroleum stockpiles in the United States on May 1.10
Prices dropped precipitously in March and April 2020. The combination of falling demand, rising supply, and
diminishing storage space caused such a pronounced crude petroleum price plunge that, on April 20, crude
petroleum traded at a negative price in the intraday futures market. Producer prices for crude petroleum declined
34.0 percent in March and 48.8 percent in April. In all, the PPI for crude petroleum fell 71.0 percent from January
to April. The March and April decreases were the two largest monthly declines since the index was first published
in July 1991. The trend was similar for U.S. import prices. The Import Price Index for crude petroleum declined
34.1 percent in March and 36.6 percent in April. In all, prices for crude petroleum imports fell 62.8 percent from
January to April. As was the case with producer prices, the March and April declines in the Import Price Index were
the largest 1-month decreases since the index was first published on a monthly basis in September 1992.

The rebound: partial recovery and production cuts
After falling sharply during the early months of the pandemic, crude petroleum prices began advancing at the end
of April 2020. Producer prices for crude petroleum partially recovered from April to June, and import prices
recorded a similar recovery from April to July. The price upturn began with a supply decrease, with a positive shock
to demand eventually contributing as well.
Facing pressure from the United States and having no place to store any further petroleum surplus, Saudi Arabia
called an emergency meeting of OPEC+ from April 9 to 12, 2020.11 During the meeting, OPEC+ members agreed
to record production cuts and, this time, Russia complied as well.12 The agreement called for a composite cut of
9.7 million barrels per day through the end of June, the largest production cut ever.13 (At a followup meeting, the
cuts were extended through the end of July.) Following the agreement, OPEC production fell to its lowest level
since May 1991. In the end, Saudi Arabia, Kuwait, and the United Arab Emirates cut production beyond the
amounts that were negotiated, and production cuts were also adopted by non-OPEC+ countries. From January to

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May, the United States and Canada—the first- and fourth-largest global oil producers, respectively—reduced 
output by a combined 3 million barrels per day.
By May 2020, amid partial business reopenings in the United States and abroad, petroleum demand was showing
signs of a rebound. The IEA estimated that the number of people under some form of lockdown peaked at around
four billion in late April, even as restrictions in some countries began to ease.14 The first to emerge from the
demand slump was China, where petroleum demand in April was almost back to levels seen 12 months prior.15 In
May, crude petroleum inventories in the United States fell for the first time since January, indicating that demand
was starting to outpace reduced supply.
Crude petroleum prices responded quickly. Producer prices for crude petroleum rose 35.9 percent in May 2020,
before jumping 74.0 percent in June. Prices for import crude petroleum also advanced in both months, although
low import demand kept these advances below those for producer prices. The Import Price Index for crude
petroleum increased 18.9 percent in May and 33.3 percent in June. Just as April saw record monthly declines in
both the producer and import price indexes for crude petroleum, June recorded the largest 1-month increases in
the indexes since either of them was first published on a monthly basis.
World petroleum supplies recovered somewhat after July, as the OPEC+ cuts were reduced from 9.7 million to 7.7
million barrels per day. In addition, the countries that had previously cut production beyond agreed amounts
reversed those cuts. With prices up in May and June, U.S. and Canadian production increased as well.
The recurrence of COVID-19 cases in the United States and other countries, as well as travel restrictions, led to a
slower-than-expected recovery. Both the IEA and OPEC made downward revisions to their earlier demand
forecasts for 2020. For both 2020 and 2021, world petroleum demand is projected to decline from 2019 levels.16
One factor bolstering demand expectations is the commitment by China to increase imports of petroleum from the
United States as part of a trade agreement—a signal for continued demand recovery in the Asian country.
Table 1 shows the V-shaped price movements of crude petroleum for both domestic producers and importers. In
both cases, prices fell sharply in February, March, and April 2020, before increasing in May and June. Movements
in the producer and import price indexes for crude petroleum diverged in July. Producer prices for crude petroleum,
which had risen by a greater percentage than import prices in May and June, declined 13.7 percent in July. The
Import Price Index for crude petroleum continued to rise, increasing 21.2 percent. In August, producer crude
petroleum prices rose 11.4 percent and import crude petroleum prices advanced 3.1 percent. Producer prices fell
71.0 percent from January to April, before rising 104.2 percent from April to July. The Import Price Index for crude
petroleum declined 62.8 percent in the 3 months ended in April, before rising 92.0 percent in the following 3
months.
Table 1. Producer and import price indexes for crude petroleum, monthly percent changes, January–
August 2020
Category
PPI for
crude
petroleum

January

February

March

April

May

June

July

August

2020

2020

2020

2020

2020

2020

2020

2020

-2.5

-14.3

-34.0

-48.8

35.9

74.0

See footnotes at end of table.

4

-13.7

11.4

3-month change ( 3-month change
January– April)
-71.0

( April– July)
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Table 1. Producer and import price indexes for crude petroleum, monthly percent changes, January–
August 2020
Category
MPI for
crude
petroleum

January

February

March

April

May

June

July

August

2020

2020

2020

2020

2020

2020

2020

2020

-0.3

-10.9

-34.1

-36.6

18.9

33.3

21.2

3-month change ( 3-month change
January– April)

3.1

( April– July)

-62.8

92.0

Note: PPI = Producer Price Index; MPI = Import Price Index.
Source: U.S. Bureau of Labor Statistics.

Figure 1 shows the producer and import price indexes for crude petroleum from December 2019 to August 2020.
Despite the partial recovery in crude petroleum prices, both indexes remained below their January 2020 levels.
The volatile movement in crude petroleum prices affected prices for items down the supply chain.

The producer perspective: refined petroleum products
The COVID-19 pandemic contributed to large fluctuations in the prices for all refined petroleum products during the
first half of 2020. However, changes in demand and refiners’ reactions aiming to reduce output and shift toward 
more profitable fuels resulted in differences in the timing and severity of the pandemic’s impacts on specific 
petroleum products, such as jet fuel, diesel fuel, and gasoline. Decreased fuel demand due to voluntary consumer
choices, state-mandated stay-at-home orders, and international travel restrictions—combined with crude oil 
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oversupply resulting from the OPEC–Russia price war—produced record declines in the PPIs for jet fuel and 
gasoline in April 2020. Then, three factors caused prices to rebound: OPEC+ agreeing to limit crude production (as
described previously); refiners reducing production capacity utilization rates to near-minimum viable levels and
shuttering some plants; and demand rising as travel and business restrictions were lifted. These factors resulted in
record 1-month increases in the PPI for gasoline in May and the PPI for jet fuel in June.17
Jet fuel was the first refined petroleum product affected by the COVID-19 pandemic. At the onset of 2020,
continued growth in air travel demand led to optimistic long-term forecasts for jet fuel prices. However, as news of
the pandemic spread, global jet fuel prices began falling in January.18 Travel demand in Asia quickly declined,
leading to more pessimistic forecasts and prompting Asian airlines to cut flight capacity. In turn, Asian refiners
began shipping unneeded jet fuel to the United States.19 As the virus spread, bleaker forecasts for air travel
demand spread beyond Asia. The United States announced travel restrictions from China on January 31 and
extended restrictions to dozens of countries, including most of Europe, soon thereafter.20
Table 2 shows that jet fuel prices declined 18.9 percent in February. As more flights were canceled, global jet fuel
storage capacity continued to fill up.21 Prices continued to fall in March, decreasing 14.5 percent. By April, jet fuel
demand was down by nearly 1 million barrels per day, or 62 percent, from the 2019 average.22 The U.S.
Transportation Security Administration reported that, in April 2020, passenger checkpoint throughput was 95
percent lower than it was in 2019.23 Demand for air travel was so low that some airlines experimented by filling
unused passenger jets with cargo, and the PPI for jet fuel fell a record 48.6 percent in April.24 Refiners also
reacted to the record low demand, reducing domestic production of jet fuel to record lows in the first week of
May.25 By June, some travel demand returned, and the combination of rising crude oil prices and declining supply
contributed to jet fuel prices rising 51.7 percent in June and 15.0 percent in July.26 Prices leveled off in August, but
remained 41.3 percent below January 2020 levels.
Table 2. Producer price indexes for selected petroleum products, monthly percent changes, not
seasonally adjusted, January–August 2020
Category

January 2020

February 2020

March 2020

April 2020 May 2020

June 2020

July 2020

August 2020

Gasoline
No. 2
diesel fuel
Jet fuel

2.3

-6.4

-20.2

-53.0

45.0

37.1

9.7

-2.7

-7.2

-9.9

-12.2

-27.2

-12.4

27.3

31.5

5.9

4.6

-18.9

-14.5

-48.6

-6.8

51.7

15.0

1.5

Source: U.S. Bureau of Labor Statistics.

The pandemic affected not only demand and prices for jet fuel, but also demand and prices for diesel fuel—
although to a lesser extent. Diesel maintained more stability because of its industrial and commercial uses.27 On
April 23, 2020, EIA stated the following: “The decline in distillate fuel oil consumption so far has been less severe
than the changes in motor gasoline and jet fuel. Distillate fuel oil is primarily consumed as diesel fuel, the
predominant fuel of the trucking, locomotive, and agricultural sectors. Continued demand for distribution of
necessities such as food and medical supplies and increased home deliveries for goods likely contributed to
relatively stable demand for distillate fuel in the initial weeks following the shutdown.”28 The American Trucking
Associations reported that its For-Hire Truck Tonnage Index rose 1.8 percent in February and 1.2 percent in
March, attributing those increases mainly to trucks hauling consumer staples.29 Chasing better margins, refiners

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shifted output toward diesel.30 This led to a glut of diesel fuel, with inventories reaching their highest levels since
1982.31 Still, because of comparatively stable demand for diesel fuel, diesel prices declined less than other fuel
prices: the PPI for diesel fuel decreased 42.4 percent from January to April 2020, compared with 64.4 percent for
the PPI for jet fuel and 64.9 percent for the PPI for gasoline. Recording increases in June, July, and August, the
PPI for diesel fuel surpassed its March 2020 level.
In absolute terms, COVID-19 affected demand and prices for gasoline more than demand and prices for other
refined petroleum products. In April 2020, when 90 percent of the U.S. population was under some type of stay-athome orders, demand for gasoline (measured by EIA as “product supplied”) fell by 3.5 million barrels per day, or 
37 percent, below its April 2019 level.32 This low demand, the lowest in over 50 years, led to a 53.0-percent
decline in the PPI for gasoline—the largest 1-month decline since the series began in February 1947.33
Meanwhile, gasoline stocks reached record highs, and the U.S. Environmental Protection Agency extended
deadlines for the switch to summer-grade gasoline as storage tanks were still full of winter-grade gasoline.34
Refiners hoped to take advantage of low crude petroleum prices to supply diesel, but meanwhile they continued to
produce unwanted gasoline. As a result, producers occasionally resorted to selling a barrel of gasoline for less
than the cost of a barrel of crude petroleum.35 However, low gasoline prices, the Memorial Day holiday, and
loosened lockdowns put more drivers on the roads in May, reviving demand for gasoline. This brought attention to
some novel real-time proxies for rising gasoline demand, such as an uptick in the relative number of cellphone
navigation app requests.36 EIA statistics also indicated that demand in May reached pre-pandemic levels. Still,
according to EIA, demand for the summer driving season remained about one-fifth below its historical average.37
As crude oil prices and demand rebounded, the PPI for gasoline jumped 45.0 percent in May, a record 1-month
increase. Some U.S. regions recorded gasoline blendstock spot price increases of more than 100 percent from the
previous month.38 Producer gasoline prices continued their advance, rising 37.1 percent in June and 9.7 percent in
July, before leveling off in August at 25.5 percent below their January 2020 level. (See figure 2.)

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Margins for gasoline stations: a response to energy market shocks
A portion of refined oil products flows to retailers, a group facing related but distinct impacts from the pandemic.
The PPI for automotive fuels and lubricants retailing measures the average change in margins that fuel retailers
receive for the sale of automotive fuel. These margins are measured as the difference between the average selling
and acquisition prices for fuel products. For U.S. fuel retailers, early 2020 was just as volatile as it was for many
other businesses. Fuel retailer costs depend heavily on global crude oil prices, and retail firms generally use a
“sticky price method” to set prices. As oil prices decrease, retailers hesitate to adopt commensurately lower selling 
prices because of future market uncertainty. The result is higher margins when crude oil prices fall, as the gap
between acquisition and sales prices widens. Likewise, as crude oil prices increase, fuel retailers often are slower
to raise selling prices. This dynamic is generally driven by local competition: if a retail price increase is not
matched locally, customers will go to competing gas stations. As a result, fuel retailers often post lower margins
when oil prices rise.39
With the small decrease in crude oil prices reported in January 2020, retail margins increased as costs fell. Over
the month, the PPI for automotive fuels and lubricants retailing increased 2.1 percent. The crude oil price decrease
extended into February, driving fuel retailer input costs further downward. As a result, the margins for automotive
fuel and lubricant retailers increased an additional 2.7 percent in February.
In March 2020, rising COVID-19 cases, particularly in the United States, coupled with the OPEC–Russia price war, 
further disrupted crude petroleum markets. Several European countries and some areas in the United States

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imposed mandatory lockdowns, substantially decreasing demand for crude oil. The large demand drop allowed
automotive fuel and lubricant retailers to expand margins, which increased 24.0 percent in March.
In April, widespread stay-at-home orders and business closures in the United States continued to drive down
refined fuel demand and crude oil prices. Fuel retailers took advantage of input price decreases by further
expanding margins. In April, the PPI for automotive fuels and lubricants retailing increased an additional 33.4
percent.
By May, several countries had started to reopen their economies, increasing global demand for fuel. The resulting
crude oil price increase raised the cost of fuel for U.S. fuel retailers. The retailers increased selling prices to
compensate for the rising cost, but they did so slowly because of the higher-than-average margins received over
the previous few months. As summer began, fuel retailers continued to report lower margins amid a continued
recovery in oil prices. The PPI for automotive fuels and lubricants retailing declined 9.1 percent in May, 12.8
percent in June, and 5.2 percent in July. (See table 3.)
Table 3. Producer price indexes for automotive fuels and lubricants retailing, monthly percent changes,
not seasonally adjusted, January–August 2020
Category
Automotive fuels
and lubricants
retailing

January 2020 February 2020 March 2020
2.1

2.7

April 2020

24.0

33.4

May 2020 June 2020 July 2020 August 2020
-9.1

-12.8

-5.2

-3.5

Source: U.S. Bureau of Labor Statistics.

Consumer gasoline prices
This section discusses how BLS measures consumer gasoline prices and how these prices have changed over the
course of the COVID-19 pandemic.

BLS measures of consumer gasoline prices
The Consumer Price Index (CPI) measures the average monthly change in prices that U.S. consumers pay for a
representative market basket of goods and services. To calculate the CPI for gasoline, BLS samples gasoline
prices in 75 metropolitan areas across the country, collecting about 3,800 prices each month. At all gas stations
sampled, BLS collects prices for regular, midgrade, and premium gasoline, publishing price indexes for each
category. In addition, BLS publishes a gasoline (all types) price index, which is based on prices for all three
grades, and a price index for other motor fuels, which includes sampled prices for diesel and alternative motor
fuels.
The average prices captured by the consumer price indexes reflect what consumers pay at the pump per gallon,
including all sales and excise taxes. Besides taking into account the specific grade or octane level of the fuel
purchased, gasoline prices in the CPI reflect specific levels of service (full service or self-service) and brand name.
Normally, BLS economic assistants collect gasoline prices in person across the country. Since March 16, 2020,
when COVID-19 concerns prompted the suspension of in-person data collection, BLS has transitioned to
alternative methods for collecting all gasoline price data. After encountering problems during initial attempts at

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collection by telephone, economic assistants shifted to collecting data from websites, supplementing them with a
third-party source. However, the outlets and specific prices in the sample remained unchanged; only the method of
collection varied.
For gasoline, as with most CPI items, BLS collects any given price during one of three specified pricing periods
within a calendar month: roughly the first 10 days, the second 10 days, and the final 10 days of the month.
Because the process involves collecting a similar number of prices during each period, the gasoline index
represents an average of prices over the course of the month.
In addition to publishing the CPI for gasoline, BLS publishes average price data for gasoline. These data include
average prices for gasoline (all types), the three individual grades of gasoline, and diesel fuel.

Consumer gasoline prices in 2020: supply and demand factors push gasoline
prices to their lowest level since 2009
In December 2019, the average price for gasoline (all types) was $2.65, the highest December level since 2013.
(See figure 3.) Historically, gasoline prices have typically risen through the early part of the year, peaking in the
summer, but in the first 4 months of 2020, they declined sharply, bottoming out at $1.95 in April and May, the
lowest level since January 2009, near the trough of the Great Recession. (In Dallas, prices fell to $1.41 in May, the
lowest level across all metro areas for which prices were published.) Prices increased in June and July, but the
July figure of $2.24 remained 15.4 percent lower than the December 2019 level and stayed virtually unchanged in
August.

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The gasoline price index tells a story similar to that of average price values. (See table 4.) On a seasonally
adjusted basis, the gasoline price index fell 34.8 percent from December 2019 to the May 2020 trough. The index
rose in June, July, and August, but remained 21.2 percent below its December 2019 level. (The index decline is
larger than the average price decline because, for seasonal reasons, gasoline prices are generally higher in
December than in July.)
Table 4. CPI for gasoline (all types), monthly percent changes, January–August 2020
Category
Gasoline,
all types

January

February

March

April

May

June

July

August

3-month change (

3-month change (

2020

2020

2020

2020

2020

2020

2020

2020

January– April)

April– July)

-1.6

-3.4

-10.5

-20.6

-3.5

12.3

5.6

2.0

-31.4

14.4

Note: CPI = Consumer Price Index.
Source: U.S. Bureau of Labor Statistics.

Examining the series month by month reveals modest initial declines: in January 2020, the CPI for gasoline fell 1.6
percent on a seasonally adjusted basis and the average gasoline price dropped by just over 2 cents. These
declines were similar to those in crude oil prices in January. The declines accelerated in February, as the
seasonally adjusted gasoline price index dropped 3.4 percent and the average price fell by about 10 cents.
However, the February declines were outpaced substantially by the sharp decline in crude oil prices during the
month. This pattern is common, because consumer gasoline prices tend to be less volatile than crude petroleum
prices, recording similar but more muted movements. While global demand fell in February, economic conditions
within the United States remained fairly normal; the brunt of the pandemic-related contraction began in March.
As global crude oil prices continued falling and COVID-19 spread in the United States, gasoline prices at the pump
fell sharply in March 2020. The seasonally adjusted CPI for gasoline declined 10.5 percent, and the average price
for gasoline fell by nearly 20 cents. The decline accelerated in April. With lockdowns throughout much of the
United States reducing driving, and with crude oil prices falling sharply, the average price for gasoline fell by
almost 40 cents and the gasoline price index fell 20.6 percent, the largest monthly decline since November 2008.
Despite increases in the producer and import price indexes for crude petroleum in May 2020, the CPI for gasoline
declined. The gasoline index fell 3.5 percent, while the average price remained stable, at $1.95. As crude oil prices
continued to recover and the economy partially reopened, the CPI for gasoline started to rebound in June and July.
The index rose 18.6 percent over the 2 months, and the average price recovered about 30 cents of its 70-cent
decline per gallon. A smaller increase of 2.0 percent followed in August. Like the producer and import price indexes
for crude petroleum, the CPI and average prices for gasoline remained well below their December 2019 levels.

Conclusion
In early 2020, BLS price indexes for petroleum products reflected the dramatic shift in economic activity caused by
the onset of the COVID-19 pandemic. Shocks to demand and then supply pushed prices for petroleum products
downward. From January to April, BLS reported substantial decreases in the Import Price Index for crude
petroleum; the PPIs for crude petroleum, gasoline, diesel, and jet fuel; and the CPI and average consumer prices
for gasoline. PPI margins for automotive fuel and lubricant retailers were driven sharply upward by the decrease in

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petroleum prices over the same period. Although pronounced, the market forces driving BLS energy price indexes
during the first quarter of 2020 did not persist. The end of the OPEC–Russia price war, coupled with economic 
reopenings in the United States and abroad, pushed petroleum prices upward from April to July. Notwithstanding
the rebound, BLS price indexes for petroleum products recorded lower levels than those prior to the pandemic. In
all, the story of the first 8 months of 2020 was one of petroleum price fluctuations starting from the barrel for
importers and refiners and extending all the way to the pump for end consumers.
The COVID-19 pandemic affected the collection of BLS price data, although the impact for price indexes in the
energy sector was less pronounced than that in other sectors. Despite the constraints associated with the
pandemic, price data collection has continued at a sufficient level, allowing BLS to publish dependable, highquality price indexes.
SUGGESTED CITATION

Kevin M. Camp, David Mead, Stephen B. Reed, Christopher Sitter, and Derek Wasilewski, "From the barrel to the
pump: the impact of the COVID-19 pandemic on prices for petroleum products," Monthly Labor Review, U.S.
Bureau of Labor Statistics, October 2020, https://doi.org/10.21916/mlr.2020.24.
NOTES
1 For more information, see “Timeline: how the new corona virus spread,” Al Jazeera, September 20, 2020, https://
www.aljazeera.com/news/2020/01/timeline-china-coronavirus-spread-200126061554884.html.
2 For more information on the import crude petroleum price index, see “Measuring price change for crude oil, gasoline, and fuel oil in 
the U.S. Import/Export Price Indexes” (U.S. Bureau of Labor Statistics, November 2012), https://www.bls.gov/mxp/publications/
factsheets/oil-industry-facts.pdf.
3 Alfred Cang, Javier Blas, and Sharon Cho, “China oil demand has plunged 20% because of the virus lockdown,” Bloomberg,
February 2, 2020, https://www.bloomberg.com/news/articles/2020-02-02/china-oil-demand-is-said-to-have-plunged-20-on-viruslockdown.
4 Meng Meng and Florence Tan, “China overtakes U.S. again as world’s top crude importer,” Reuters, October 12, 2016, https://
www.reuters.com/article/us-china-economy-trade-crude/china-overtakes-u-s-again-as-worlds-top-crude-importer-idUSKCN12D0A9.
5 Grant Smith, Nayla Razzouk, and Matthew Martin, “OPEC tries to force Russia into deeper cuts as oil price slumps,” Bloomberg,
March 5, 2020, https://www.bloomberg.com/news/articles/2020-03-05/opec-meets-in-effort-to-bridge-saudi-russia-divide-on-oil-cuts.
6 Ibid.
7 Javier Blas, “Trump’s oil deal: the inside story of how a price war ended,” Bloomberg, March 13, 2020, https://www.bloomberg.com/
news/articles/2020-04-13/trump-s-oil-deal-the-inside-story-of-how-the-price-war-ended.
8 Ibid.
9 For more information on crude petroleum stockpiles, see “U.S. commercial crude oil inventories reach all-time high,” Today in
Energy (U.S. Energy Information Administration, June 29, 2020), https://www.eia.gov/todayinenergy/detail.php?id=44256.
10 The record was eventually broken on June 26, despite production levels falling after mid-April.
11 OPEC+ is made up of the OPEC member countries and Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman,
Russia, South Sudan, and Sudan.
12 Blas, “Trump’s oil deal.”

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13 Initially, Mexico was reluctant to agree to the entire cut, but it did so after the United States agreed to cut production to cover the
remainder of Mexico’s obligation.
14 For more information, see Oil market report—May 2020 (International Energy Agency, May 2020), https://www.iea.org/reports/oilmarket-report-may-2020.
15 For more information on petroleum demand, see Oil market report—June 2020 (International Energy Agency, June 2020), https://
www.iea.org/reports/oil-market-report-june-2020.
16 Andres Guerra Luz, “Oil drops with IEA demand outlook pointing to weakness ahead,” Bloomberg, August 12, 2020, https://
www.bloomberg.com/news/articles/2020-08-12/oil-holds-gains-on-rising-u-s-demand-shrinking-stockpiles; and Grant Smith, “OPEC 
sees weaker outlook as demand falters, shale recovers,” Bloomberg, September 14, 2020, https://www.bloomberg.com/news/articles/
2020-09-14/opec-sees-weaker-oil-outlook-as-demand-falters-shale-recovers.
17 Javier Blas, Salma El Wardany, and Grant Smith, “Oil price war ends with historic OPEC+ deal to slash output,” Bloomberg, April
12, 2020, https://www.bloomberg.com/news/articles/2020-04-12/oil-price-war-ends-with-historic-opec-deal-to-cut-production; “Weekly 
U.S. percent utilization of refinery operable capacity” (U.S. Energy Information Administration), https://www.eia.gov/dnav/pet/hist/
LeafHandler.ashx?n=PET&s=WPULEUS3&f=W; and Barbara J. Powell, “Some of America’s oil refineries may be on brink of 
shutting,” Bloomberg, April 8, 2020, https://www.bloomberg.com/news/articles/2020-04-08/some-of-america-s-oil-refineries-faceclosure-amid-demand-plunge.
18 “Jet fuel price monitor” (International Air Transport Association), https://www.iata.org/en/publications/economics/fuel-monitor/.
19 Elizabeth Low, “Jet fuel’s luster tarnished by virus with demand in doubt,” Bloomberg, February 25, 2020, https://
www.bloomberg.com/news/articles/2020-02-25/jet-fuel-s-luster-tarnished-by-virus-with-demand-story-in-doubt.
20 “Presidential proclamations on novel coronavirus” (U.S. Department of State, June 29, 2020), https://travel.state.gov/content/travel/
en/News/visas-news/presidential-proclamation-coronavirus.html.
21 Alex Longley, Elizabeth Low, and Jack Wittels, “Glut of jet fuel is on brink of overwhelming global storage,” Bloomberg, March 22,
2020, https://www.bloomberg.com/news/articles/2020-03-22/a-glut-of-jet-fuel-is-on-brink-of-overwhelming-global-storage.
22 Jesse Barnett, “COVID-19 mitigation efforts result in the lowest U.S. petroleum consumption in decades,” Today in Energy (U.S.
Energy Information Administration, April 23, 2020), https://www.eia.gov/todayinenergy/detail.php?id=43455.
23 “TSA checkpoint travel numbers for 2020 and 2019” (U.S. Department of Homeland Security, Transportation Security 
Administration, updated daily), https://www.tsa.gov/coronavirus/passenger-throughput.
24 Jennifer Smith, “Passenger airlines start shifting idled planes into freight business,” The Wall Street Journal, March 20, 2020,
https://www.wsj.com/articles/passenger-airlines-start-shifting-idled-planes-into-freight-business-11584737793?
mod=searchresults&page=1&pos=4.
25 “Weekly U.S. product supplied of kerosene-type jet fuel” (U.S. Energy Information Administration), https://www.eia.gov/dnav/pet/
hist/LeafHandler.ashx?n=PET&s=WKJUPUS2&f=W; and “Weekly U.S. refiner and blender net production of kerosene-type jet 
fuel” (U.S. Energy Information Administration), https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WKJRPUS2&f=W.
26 In this article, Producer Price Index (PPI) data for June–September 2020 are preliminary. To reflect late reporting by survey 
respondents, all PPIs are recalculated 4 months after original publication.
27 Ahmad Ghaddar, Koustav Samanta, and Ron Bousso, “Diesel gathers momentum as other fuels bear brunt of coronavirus impact,” 
Reuters, March 30, 2020, https://www.reuters.com/article/us-global-oil-refining/diesel-gathers-momentum-as-other-fuels-bear-bruntof-coronavirus-impact-idUSKBN21H1YY.
28 Barnett, “COVID-19 mitigation efforts result in the lowest U.S. petroleum consumption in decades.”
29 “ATA Truck Tonnage Index rose 1.2% in March” (Washington, DC: American Trucking Associations, April 21, 2020), https://
www.trucking.org/news-insights/ata-truck-tonnage-index-rose-12-march.

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30 Janet McGurty, “US refiners shift into maximum diesel mode as gasoline prices dip below $1/gal,” S&P Global Platts, April 3, 2020,
https://www.spglobal.com/platts/en/market-insights/latest-news/oil/040320-us-refiners-shift-into-maximum-diesel-mode-as-gasolineprices-dip-below-1gal. 
31 Jack Wittels, Jeffrey Bair, and Elizabeth Low, “A glut of diesel is quietly undermining oil price resurgence,” Bloomberg, June 8,
2020, https://www.bloomberg.com/news/articles/2020-06-08/a-glut-of-diesel-is-quietly-undermining-oil-price-resurgence; and “Weekly 
U.S. ending stocks of distillate fuel oil” (U.S. Energy Information Administration), https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?
n=PET&s=WDISTUS1&f=W.
32 Philip Bump, “Nearly all Americans are under stay-at-home orders. Some may have come too late,” The Washington Post, April 2,
2020, https://www.washingtonpost.com/politics/2020/04/02/nearly-all-americans-are-under-stay-at-home-orders-some-may-havecome-too-late/; and “This week in petroleum” (U.S. Energy Information Administration, July 1, 2020), https://www.eia.gov/petroleum/
weekly/archive/2020/200701/includes/analysis_print.php.
33 Robert Rapier, “Gasoline demand collapses to a 50-year low,” Forbes, April 9, 2020, https://www.forbes.com/sites/rrapier/
2020/04/09/gasoline-demand-collapses-to-a-50-year-low/#283cd784196e.
34 “Weekly U.S. ending stocks of total gasoline” (U.S. Energy Information Administration), https://www.eia.gov/dnav/pet/hist/
LeafHandler.ashx?n=PET&s=WGTSTUS1&f=W; and Jennifer A. Dlouhy and Jeffrey Bair, “U.S. delays switch to summertime gas after 
virus reduces driving,” Bloomberg, March 27, 2020, https://www.bloomberg.com/news/articles/2020-03-27/u-s-delays-switch-tosummertime-gas-after-virus-reduces-driving.
35 Rebecca Elliott and Russel Gold, “Gasoline is cheap, but with coronavirus, nobody’s buying,” The Wall Street Journal, March 30,
2020, https://www.wsj.com/articles/gasoline-is-cheap-but-with-coronavirus-nobodys-buying-11585570263?
mod=searchresults&page=1&pos=16.
36 Amrith Ramkumar, “Return of car traffic fuels surge in oil,” The Wall Street Journal, May 19, 2020, https://www.wsj.com/articles/
return-of-car-traffic-fuels-surge-in-oil-11589880602?mod=hp_lead_pos6.
37 “U.S. gasoline demand” (U.S. Energy Information Administration), https://www.eia.gov/petroleum/weekly/images/gtpsusm.gif; and
Jeffrey Bair, “U.S. gasoline demand is at pre-pandemic levels. Don’t cheer yet,” Bloomberg, July 8, 2020, https://www.bloomberg.com/
news/articles/2020-07-08/u-s-gasoline-demand-is-at-pre-pandemic-levels-don-t-cheer-yet.
38 “Los Angeles reformulated RBOB regular gasoline spot price” (U.S. Energy Information Administration), https://www.eia.gov/dnav/
pet/hist/EER_EPMRR_PF4_Y05LA_DPGD.htm.
39 Jeff Rubenstein and Michael Conforti, “As crude oil plunges, retail gasoline margins spike, then retreat,” Beyond the Numbers, vol.
4, no. 13 (U.S. Bureau of Labor Statistics, December 2015), https://www.bls.gov/opub/btn/volume-4/as-crude-oil-plunges-retailgasoline-margins-spike-then-retreat.htm.

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