The transition to summer-blend fuel has gas prices rising across the nation.
As fuel refineries prepare for the production of summer-blend gasoline and conduct their seasonal maintenance, fuel prices are on the rise across the country.
According to a report from AAA, the national average price for gasoline has reached above $2 per gallon, and average prices have increased for the past 21 days. The average price per gallon, as of March 29, 2016, is $2.04, which is up six cents on the week and 30 cents on the month.
However, despite the steady increase, according to AAA, the average price per gallon is still 39 cents lower than this time last year.
As June 1, the deadline for switching to summer-blend fuel, approaches, refineries and storage facilities are adjusting their supply in order to service stations that are bound by regulations from the EPA. The report from AAA stated that retailers in numerous states are required to sell summer-blend gasoline by June 1, because this blend is less likely to evaporate and contribute to air pollution on the summer heat. This transition to a new fuel often leads to higher prices, because refineries are selling-off their existing supply of gasoline, thereby reducing supply, in order to make room for the seasonal fuel blend. What’s more, demand for gasoline tends to increase in the warmer months, and this increase in demand added to the decrease in supply leads to increased prices.
AAA reported that, as prices rise, California remains the most expensive gasoline market in the nation, with prices per gallon averaging $2.77. Ongoing refinery challenges and increased demand has brought California state inventories to an 11-week low, contributing to the high average price per gallon. After California, Hawaii ($2.56), Nevada ($2.41), Alaska ($2.29) and Washington ($2.28) are sporting the nation’s highest averages, while New Jersey ($1.83) and Missouri ($2.85) boast the lowest average prices for fuel.
