Much of the country has been enjoying low gas prices lately, some states more than others. There are several factors contributing to this year's dip, but gas prices are typically lower during the winter. If you ask your know-it-all uncle, he will probably tell you that gas prices drop when it gets cold because people are driving less, thus decreasing the demand for gasoline. To a certain extent, he's right. People do most of their road trips during the spring and summer months. But that's not the real reason gas is cheaper in the winter.
The Real Reason
The reason for the price change is that winter gasoline and summer gasoline are produced using a different formula of additives. The practice of using different gasoline grades for the seasons began in 1995 with the Reformulated Gasoline Program, or RFG as the EPA calls it (their acronym, not ours). Without getting too scientific, the summer heat brings increased levels of smog and ozone, so summer-grade gasoline is formulated to produce fewer emissions. The formula for summer-grade gasoline costs more to produce so it costs more at the pump.
The seasonal price change is not the same across the country. As we alluded to, a lot of factors play into the price you pay to feed your four-wheeled monster. In general, gas tends to be cheaper in areas that are close to oil refineries or other petroleum infrastructure. Proximity means lower transportation costs, but it also means that the local governments are incentivized to keep the gas companies happy. That's why you'll find the lowest state gas taxes in Alaska and New Jersey. State gas taxes can vary as much as 40 cents per gallon. If you want to see where your state fits in, check out our infographic on state gas tax.
The change in fuel grade happens twice a year. The transition to summer-grade gasoline happens in the spring from April to June, and the transition back to winter-grade happens in September. Although the exact timing of the transition may differ based on the climate of the location. There are actually 20 different blends of gasoline sold in the United States to satisfy the regulations of each location. According to the EPA, the program has been significant in reducing air pollution, helping millions breath easier each year.
Overall, the Reformulated Gasoline Program has been cost-effective. However, the transition means that gasoline production facilities have to shut down for a time. This causes a disruption in the supply which pushes the price up. Oil refineries are already operating at maximum or near-maximum capacity, so every hour of downtime hurts the consumer.
The Effect On Your Car
Let's say that you have a son or daughter that goes to college several hours away from home. They have a car to get around when they're in town but they don't take it with them to college. They fill up the tank (unlikely, but play along with us) in January before they leave for the Spring semester, and they come back for the summer and drive the car. Will running a car in the summer with winter-grade fuel have a negative effect? Probably not as much as putting the wrong gas in your car, but your car will most likely be less fuel efficient and generally run worse.
Winter-grade gasoline contains higher levels of butane (which is less-expensive, contributing to the lower price) which lowers the Reid Vapor Pressure, or RVP. This means that winter-grade gasoline builds up pressure more easily in the tank and evaporates, producing ozone (which is bad). Basically, if you know it'll be a different season by the next time you drive the car, don't fill up the tank. Finally your son or daughter has a valid reason for only putting $10 in the tank at a time.
Mojo Motors is a website where shoppers Follow used cars to get alerts when dealers drop prices.