We all know that gas pricing is volatile; we’ve seen a 50 cent increase in just the past few months. But what’s the reason for the increase? We’ll explain below:
- Less COVID restrictions = more travel = more demand for gas
It’s been a crazy year. Now that Spring is inching closer and Covid conditions are improving, people are itching to get out and drive more. The higher demand is driving costs up.
- OPEC production – less crude being produced = lower supply of oil & gas
We’re seeing an increase in both international and domestic demand for crude oil. When supply is down and demand is up, the price will increase. It’s simple economics. And to compound matters, refiners favor higher gas prices to improve their margins and economists always want a little inflation.
- Squeeze on Fracking – have to import more crude and gas = more expensive
With increased regulation on fracking and sourcing domestic crude, we are forced to import gas and crude which is more expensive.
- EPA Requirement to switch to Summer Blend Gas Transition
EPA air quality standards require suppliers to switch to a more expensive summer blend of gas to reduce air pollution with less fumes. Summer-grade gasoline has a lower volatility than winter-grade gasoline and is more environmentally friendly, limiting the evaporative emissions or fumes from vehicles into the air. The switch to summer grade gasoline started in 1995 as part of the Reformulated Gasoline Program (RFG), established through the 1990 Clean Air Act Amendments.
Here at Stewart’s Shops, we hate to see gas prices go up just as much as you do. While OPEC and refiners want to drive the cost up, we are trying to keep prices low while balancing the EPA summer grade requirements and rising costs. Rest assured; we’re doing what we can to keep prices down at the pump!
We’ll continue to hedge our gas purchases to bring you the lowest prices possible because we are drivers too!