What Will Gas Prices Look Like This Summer?
In this column a few months back, we discussed the “hows and the whys” that fuel prices drop over the winter months. But as springtime draws near and temperatures begin to rise, so, too, do costs at the pump. And judging by how fuel prices have steadily risen since late January, summer fuel blending will only continue to both target—and shrink—our respective pocketbooks.
For instance, since January 11, the national average retail price of regular unleaded gasoline has climbed 13.02 cents per gallon, according to the most recent Lundberg Survey of U.S. fuel markets. And in the two weeks ending February 22, the average retail price had jumped another 10.13 cents. Yes, that’s nearly a quarter increase in a little more than six weeks! But as previously mentioned, the bleeding doesn’t just stop there.
Due to planned maintenance at some of the country’s largest refineries, approximately 14% of the total national refining capacity is currently offline. Therefore, production remains at a standstill until all maintenance projects have been completed. At the same time, federal regulations for Reid Vapor Pressure (RVP) levels are rolling out over the coming weeks which only further add to the overall cost per gallon. RVP levels which were high during winter months must be significantly lowered for summer fuel blending in order to avoid the fuel from evaporating too quickly and leading to volatility. Volatility contributes to ground-level ozone which leads to smog and respiratory problems in humans. And since RVP lowering must be completed when fuel is first being refined, the added refining cost gets passed on to consumers. Therefore, as a result of changes in RVP alone, we could very well see an increase of at least another dime per gallon—and those are conservative estimates.
But, fortunately, the news is not all doom and gloom as lowered RVP also carries with it some benefits. With March spring breaks and the Easter holiday weekend, automobile travel will most certainly increase compared to the minimal travel motorists saw in January and February. And although lowered RVP will cost more initially, one can expect to see an increase in average miles per gallon as a result of the RVP change. And when our respective odometers are spinning at an ever-increasing rate, any rise in miles per gallon is much appreciated.
So all this to be said, let’s attempt to keep our proverbial seatbelts on as we continue to weather the price storms at the pump. In other words, please do not allow this seasonal occurrence to affect your physical health—it is certainly not worth the blood pressure spike. Because at the end of the day, a few extra pennies at the pump certainly beat riding a bike.