News

Spring is About to be Sprung – And the Price of Gas is Not Far Behind

Tuesday, March 29, 2016

The past year has seen the lowest gas prices in more than a decade as some areas have seen prices well below $2 a gallon. As spring approaches, though, the price of gas is expected to climb again, regardless of the supply and demand factors that originally drove the price down.

As Forbes reports, the answer comes down to the environment and helping to keep air clean. The evaporation of gas from fuel systems is a major contributor to smog and evaporation rates increase as the temperate warms up.

To help reduce smog, the Environmental Protection Agency monitors the types of gasoline blends that companies can sell. These blends change seasonally and from region to region, but as a general rule, they must be more environmentally friendly in the warmer months.

It is costlier for companies to produce these warmer blends, so the price of gas follows the increase in protection of these more expensive fuel blends. Gasoline companies are currently selling off the end of their winter gasoline to make sure everything they sell by May meets the EPA’s summer standards.

The rise in price fluctuates year to year, but it typically falls between 30 and 40 cents per gallon. While that’s not a huge amount for the normal consumer, it makes a big difference for industry’s that see their bottom line change drastically based on the price of gas.

Gas prices have dropped about 50 during the past 12 months, equating to a $550 savings for the average American household. That is a nice savings for a family, but it’s about to go away. Plus, depending on how overseas production changes in the coming months, gas prices could jump even higher.

While we’re a long way away from seeing the high prices of 2008, it’s obvious that the period of low prices we’ve seen in the past few years is about to come to an end as well – and finally a bit of good news for oil producers!

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