Now that we’ve paid tribute on Memorial Day, summer has once again (unofficially) arrived and so have higher prices at the pump. Contrary to popular belief, it’s not only because we tend to drive more in the summer (did I hear you say road trip?), but also due to other factors that we pay more to fill up during the summer months than we do in the winter.
Increased demand is most certainly a factor, but not as much as you might think. The gasoline we pump into our vehicles is different in the summer than it is in the winter. Back in the mid 1990s, to curb the number of smog days and reduce overall pollution in major cities, the Environmental Protection Agency started the Reformulated Gasoline (RFG) Program established through the 1990 Clean Air Act Amendments.
The RFG program means that the fuel we use in the summer is less polluting than in the winter. For consumers it can be a double whammy though; not only is the fuel more expensive at the pump; summer fuel is less efficient, and we end up burning through it quicker than we use winter fuels, meaning we fill up more often too.
The transition to summer fuels usually takes place around April in time for the start of the summer season. To make the new fuel, refineries must briefly shut down production while they amend their processes. This production shortfall also has an effect on the prices of gasoline, even though we go through the same process every year.
With so much volatility in the price of oil and availability of refining capacity, it can be costly and difficult for refineries to balance their maintenance needs and make the transitions necessary to comply with the regulations, which has an impact on the fuel prices.
It’s not every year that we feel a sharp effect of rising fuel costs due to this switch, as other factors most certainly play into this market. But if you’ve ever caught yourself wondering why that summer road trip is more expensive, this might be your answer.