This happens every year, gas prices rise in the spring. And every year we get told it’s this or that or the other – when in fact it’s the combination of the environmentalists and the regulators causing it. Hey, it might even be righteous that they should rise in the spring, that all those rules and laws from both are entirely just. But we should still put the cause as being what it is.
The annual spring rise in gasoline prices is engineered.
Kentucky recently saw the largest weekly increase in gas prices in the country. AAA said that the global economy is partially to blame. Kentucky’s average price per gallon jumped 16 cents in one week, that’s the largest weekly increase across the country. Nationally, average prices only went up seven cents. However, Kentucky’s average of $2.48 a gallon is still lower than the national average of $2.55. AAA said the feeling that the global economy is slowing down has a lot to do with the increase in prices, along with the fact that petroleum exporting countries have had an agreement to cut back production since the start of the year, which has brought gasoline stocks down.
That’s pretty weak tea. The idea that a slowing economy reduces gas prices is ludicrous. And the wholesale price of crude oil hasn’t changed all that much in recent weeks.
Spring is traditionally the period when refineries do repairs and maintenance. State gas taxes are also a factor. There is a very wide swing between the states with the highest and lowest gas taxes. Oil prices are generally the culprit when gas prices rise. In this rare case, they are not entirely the cause. Crude has only increased modestly from $57.26 a barrel three weeks ago to $58.87.
It’s not really maintenance either. Certainly not in the sense of, hey we’ll do our annual maintenance in the spring just because. For if it were then competition would mean different refineries would stagger it. No, again, this is caused and caused domestically:
Patrick DeHaan, the fuel-tracking website’s head of petroleum analysis, referred to 2019 as “nothing short of madness at the pumps” in the Great Lakes. “Excess inventory of winter gasoline paved the way for deep discounts in some states after the holidays, and now with the transition to cleaner, more expensive summer gasoline underway, supply has tightened, and those previous deep discounts have vaporized,” DeHaan writes in a post on GasBuddy’s website. “The news doesn’t get much better either: motorists can expect the jumps at the pump to continue into April, and perhaps even lasting up to Memorial Day, when the transition to summer gasoline and refinery maintenance have generally wrapped up.”
Note that. More expensive summer gasoline.
So, what happens is that we’ve a winter blend for fuel. It’s not entirely but pretty much the same across the country. Then we’ve the summer blend. The environmentalists insist. And they also insist on different blends for different places. The summer blends are both more expensive in themselves and also lose some of the economies of scale, making them more expensive again. That’s why gas goes up in the spring. Because we’re changing from the cheaper winter gas to the more expensive summer stuff. It is the environmentalists and regulations which cause this. Hey, maybe they’re even right to do so. But they are the cause.
As to maintenance, well, when are you going to do that? Well, when you’ve got to close or at least slow down the refinery to change over the blend of gas it’s making, of course. So, given that the blend has to change in the spring that’s when the maintenance is done.