The U.S. Energy Information Administration’s (EIA) May 12 “Short-Term Energy Outlook” projects regular-grade motor gasoline retail prices, which averaged $3.26/gal. in 2008, to average $2.12 this year. That’s down 4¢/gal. from last month’s projection. Regular-grade gasoline retail prices are projected to rise to $2.30/gal. in 2010, 12¢ lower than projected in the previous report.

EIA says the projections indicate total gasoline margins, which had declined last year as a result of weakness in gasoline consumption and growth in ethanol supplies, “are expected to stabilize, albeit at low levels, as consumption slowly recovers and increases in ethanol supplies moderate.”

Meanwhile, diesel fuel retail prices, which averaged $3.80/gal. in 2008, are projected to average $2.26/gal. in 2009, down 4¢/gal. from last month’s outlook. Diesel fuel retail prices are projected to average $2.48/gal. in 2010, down 21¢ from the previous outlook.

See the full report.