Summer Gas Prices

(Photo: Warner Home Video)

 

By Ian Nemelka

As Labor day weekend passes, unofficially marking the end to Summer for many, gas prices will slowly, but surely begin to drop. Why is gasoline more expensive in the Summer than in the Winter? The common explanation is increased travel during the Summer increases the demand of fuel, resulting in higher prices. Although the application of this basic economic principle is appreciated, it actually doesn’t give us the entire picture. A greater factor in determining seasonal fuel prices is something few people even know exists. It is called seasonal gasoline transition.

Since the implementation of the 1990 Clean Air Act, the Environmental Protection Agency (EPA) has enforced the use of reformulated gasoline blends from April through September. That’s right! The fuel you have been filling your car with this Summer is different from the fuel used in the Winter! This process (called blending) means the Summer blend is more expensive to produce, causing gasoline to cost anywhere from 2-15 cents more in the Summer months, depending on where you live. Although this Summer blend “burns cleaner,” it is also less efficient than Winter fuels. Thus,  more gasoline is required to go the same number of miles. It isn’t just in your head. You are paying more for fuel and visiting the pump more often during the summer, and unfortunately it all may be for nothing.

These EPA reformulated fuel standards, although conceived with good intentions, have increased cost to consumers while providing little to no measurable environmental benefit. Several independent studies have confirmed that focused efforts by state and local governments to improve air quality are far more effective than those imposed by the federal government. Cleaner air is important, but when the regulations used to achieve that goal are ultimately ineffective and needlessly costly, why should we continue to bear the burdens of bad policy?

Strata is committed to exploring alternative policies that lead to cleaner air, cheaper energy, and entrepreneurial innovation.

Learn more about seasonal reformulated fuel standards here:

https://auto.howstuffworks.com/fuel-efficiency/fuel-consumption/summer-fuel.htm

http://home.uchicago.edu/~kelloggr/Papers/AuffhammerKellogg_AER_wApp.pdf

https://www.ag.ndsu.edu/news/columns/biofuels-economics/new-energy-economics-why-do-gas-prices-rise-in-summer/

https://www.everycrsreport.com/files/20041217_RL31361_d308a99b3c7551cc875a77aa1e979b9c93cd3354.pdf