Why Gas Prices Rise in Spring

The weather is getting warmer and families are preparing their summer vacation schedules, driving throughout the Midwest while teens joyride with the windows down for the first time in months. This increased demand must bump the demand, and thus the price, of gas, right? Not exactly.

The Clean Air Act Amendments in 1990 changed how gasoline is refined during the summer months. After final implementation of the amendments in 2000, refineries were forced to change their production methods for urban areas beginning in April each year.

In the winter months, the Environmental Protection Agency (EPA) backs off, letting refineries produce a certain type of fuel that may be more polluting, but it also helps our cars start in the cold weather. The fuel is cheaper to produce and can be massively scaled for the entire country.

But in the summer, when the EPA requires many metropolitan areas to use the cleaner version of fuel to cut down on smog, refineries need to specialize production of the costlier fuel, leading to smaller batches and the inability to scale production.

In each of the past 17 years between February and June gas prices rose roughly 35 percent during this summer transition.

It is true that demand for gasoline increases in the summer, and that can play a massive role in prices. But that increase is volatile given weather and economic climate while these EPA standards are consistently enforced.

The hikes have already begun. This week, gas prices increased to a 19-month high with an eight-cent increase above last month with more increases expected.

Crop prices (April 11)

Rio Creek Feed Mill – Algoma

Fox River Valley Ethanol – Green Bay

Basis: The difference between the local cash price for a commodity and the Chicago cash price (where the Board of Trade sets national futures price).

Gas Price Averages

United States: $2.39

United States one year ago: $2.04

Wisconsin: $2.38

Wisconsin one year ago: $2.02

Northern Door: $2.49

Sturgeon Bay: $2.45

Other Commodities

Gold: $1,272.90/troy ounce

Silver: $18.22/troy ounce

Oil: $52.85/barrel

Sources: aaa.com, agweb.com, gasbuddy.com, money.cnn.com, Environmental Protection Agency, The Association for Convenience and Fuel Retailing