Happy April "Fuels"
It’s mud season here in Indiana – or Spring, as it’s commonly called – with April showers officially making their debut in the form of thunderstorms early this morning. In addition to the clouds and rain that define April, we’ve also just experienced the paranoia and suspicion that affects all of us on the first day of April: April Fools. But little did you know, in our industry, too, there is another little known April milestone—the April “fuel transition.” True, it does not have the same ring as April “Fools,” so for that reason we’ll just call it April “Fuels.”
Fuel retailers feel happy to have survived the Winter and the increased revenues the advent of warmer temperatures will bring. With an overall dwindling demand for fuel that typically accompanies the colder months, April has arrived and that means increased need for fuel as well as a different fuel blend. Oh, and let’s not forget increased fuel prices. Ah, April “Fuels.”
So just what gives?
Winter fuel blends are allowed to have a higher Reid vapor pressure. This increase means that fuel is allowed to evaporate more easily, thus making it easier to start engines in the cold winter months. Once temperatures start warming up, not only is that lower vapor pressure not needed, it’s actually a bad idea as it leads to more emissions and contributes to lower air quality. Therefore, when Spring arrives, Winter fuel has to go.
All that said, let’s bring on the Summer fuel! So, just what is different about Summer fuel? Well, for starters, it doesn’t evaporate as easily. But, on the other hand, the arrival of Summer fuels also marks the beginning of price increases. And just why is that you might ask? Many consumers believe fuel prices go up because fuel retailers know more people are driving and fuel providers simply want to make an extra buck. However, that’s not exactly the case.
All in all, Summer fuel takes longer to refine, leading to refineries charging an increased price to the retailers themselves. Naturally, that price increase is then passed on to consumers in order for the retailers to profit as well. Yes, trickle-down economics at its finest.
But there’s more. By the first of May, terminals must stop selling Winter fuel altogether. This directive leads to retailers dealing with a dwindling supply of on-hand product as they work to purge their systems of Winter fuel. An overall lack of sellable fuel again causes increased consumer prices, because, quite simply, station owners would rather risk being out of inventory than out of federal EPA compliance. Heavy fines accompany a lack of compliance and these exorbitant costs are levied against terminals that are not distributing summer fuel when the May 1 st deadline arrives.
April “Fuels” Day (April 1 st ) marks the beginning of this transition from the cheaper, easier winter fuel to the costlier, more difficult summer fuel—we say “more difficult” because there are also more fuel varieties that need to be manufactured in the summer. To meet all of the states’ varying regulations on summer fuel, 14 different fuel specs must be met.
Nearly the entire country will see June 1 st as the cutoff for the full transition to Summer fuel…unless you’re California—then it’s May 1 st .
Once the heat of Summer begins to die down, retailers can once again start selling Winter fuel; but that does not happen until mid-September—or October for Californians. With fuel retailing equipment receiving a workout due to the number of increased gallons pumping through their systems, it is crucial to have a good housekeeping routine in plan, and to stay ahead of any trouble that might be brewing.
Throughout the Summer, however, we all have more driving to do and more expensive gasoline in which to do it. So when you see your convenience store’s gas prices start creeping up, it isn’t simply a plot for them to pocket a few extra pennies—it’s just April “Fuels.” Happy—and, most of all, SAFE—travels.