There’s another reason why costs are about to rise
(NEXSTAR) – You might think inflation and the war in Ukraine are what’s driving gas prices up this spring — and yes, they are — but those aren’t the only forces at play. Environmental regulations also cause gasoline prices to rise, and this happens every year as the seasons change.
The Environmental Protection Agency requires that a different blend of gasoline be sold in the summer months than in the winter months. Summer blend has lower volatility, which means it’s less likely to evaporate when sitting in your car’s gas tank in the heat – and therefore less likely to emit harmful fumes in the atmosphere. Winter gas has a higher volatility, making it easier to start and start your car in freezing temperatures.
Why does this have anything to do with gasoline prices? Summer blend gas is more expensive to produce, says Patrick De Haan, senior oil analyst at GasBuddy.
The deadline to switch to summer gasoline sales is June 1 for gas stations, but refineries start producing the most expensive blend in March, so that’s when you’ll notice that prices go up.
“It’s as if one day refineries were to switch from summer production to winter. It’s a long transition because of the nature of the pipelines that get the gasoline to market, the storage tanks where that gasoline is, and all of that has to happen by June 1,” said De Han.
At the same time, refineries usually carry out maintenance work in the spring to ensure that they are ready for the peak season during the summer. Refineries may have to shut down parts of their operations to carry out maintenance work, which will limit their production and drive up prices further.
“There are a lot of logistical challenges that come into play that end up driving prices up because this transition is so nuanced,” De Haan said.
“We’re also starting to see demand for gasoline increase with spring break, warm weather, Americans going out after winter. So the switch to summer gas, a bigger spike in demand and the refinery maintenance are usually what pinches prices. It’s usually quite noticeable – somewhere between 25 and 75 cents [higher].”
Unlike the other things that are causing gasoline prices to skyrocket, like Russia’s invasion of Ukraine and record inflation, there’s a firm end date with this: September 15th. This is the last day the EPA requires gas stations to sell 100% summer gasoline. After this date, the cheaper winter gas mixture can start to be reintroduced.
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