AMARILLO, Texas (KAMR/KCIT) — As cooler weather settles over the United States and many anticipate a seasonal increase in the heating bills at home, others have also looked forward to a seasonal decrease in gas prices that tends to hit somewhere in September and October.
However, as the world continues to navigate shake-ups in supply chains and production strategies caused by COVID-19, Russia’s invasion of Ukraine, the OPEC+ alliance’s announcement of incoming production cuts, and other factors, the costs of day-to-day errands like grocery shopping and filling gas tanks have become less and less predictable.
What is ‘winter gas’?
Gas has a certain level of “Reid Vapor Pressure,” or RVP, that impacts how quickly it evaporates. According to the Environmental Protection Agency, it’s a measure of gasoline volatility. Gas with a higher amount of RVP ignites and evaporates more quickly, which can translate into different effects depending on environmental factors like weather. For instance, in cold weather, a higher RVP can be a benefit because gas will ignite and start cars more easily. However, in hot temperatures, an unnecessary amount of gas can burn and evaporate from fuel systems, leading to increased emissions and smog in the air.
Because of the impact RVP levels have on emissions and gas mileage, as noted by GasBuddy and the Texas Commission on Environmental Quality, a range of federal and state regulations establish guidelines for how much RVP gas can have during certain times of the year. This means that after certain dates, producers and sellers are required to offer gas that is created using a different formula. Generally, that translates into “Winter Gas” containing a higher amount of butane, which is a significant factor for RVP because of its volatility.
Most of those federal guidelines focus on a time frame from May 1 to Sept. 15. However, some regions like eastern Texas and Arizona have an extended summer ozone season that was federally approved, and are therefore allowed to start a bit later in the year.
In Texas, the Regional Low RVP Gasoline program requires that low-RVP gasoline be used in 95 central and eastern-Texas counties during the summer when ozone pollution is at its worst. As noted by the TCEQ, gas sold in those counties must have an RVP of “no greater than 7.8 pounds per square inch (psi)” from June 1 through Oct. 1 of each year. Gas suppliers are required to supply low-RVP gas to those counties from May 1 through Oct. 1 every year.
Low-RVP gas, colloquially, is referred to as “Summer Gas.” The US Energy Information Administration noted that it costs refiners more per gallon to make summer-grade gasoline because it needs to be processed differently in order to achieve a lower RVP as well as comply with other reformulated gasoline regulations that can vary by region.
Meanwhile, “Winter Gas” gets its name because it’s the formula for gas that’s commonly used and produced outside of that May-October season each year, and it’s generally thought to be more efficient in colder weather because its higher volatility means that less energy is needed to ignite it to complete tasks like starting engines.
How does ‘winter gas’ impact gas prices?
While the National Association of Convenience Stores published notes on seasonal gas price fluctuations on its website that focused on the first half of the year, it also offered insight into the generally expected impact of the switch away from “Summer Gas” into the winter-grade formulas.
Refineries tend to schedule “turnaround,” or maintenance, during times of the year when gas demand is at its lowest, such as in January and February. NACS noted that while the turnaround periods are used for maintenance, overhaul, repair, and inspection operations, refineries also take the opportunity to retool for different season-grade fuel production.
Summer-blend gases are not only required but are more expensive to make and have a range of regional expectations. NACS said that this leads to the turnaround period of the year involving refineries working to make as much of the formula as possible, and the extra needed supply for the season as well as the regular increase in demand for fuel contributes to price increases between February and May.
On the other hand, the September end of the “Summer Gas” season is normally expected to provide a welcome decrease in gas prices. As gas demand decreases seasonally and temperatures start to cool, retailers often switch to selling “Winter Gas” around mid-September. The winter blend that’s easier to make, as well as less demand, contributes to lowered gas prices.
When might gas prices drop most this winter?
As noted by the NACS, gas prices traditionally are at their lowest during the first week of February and peak right before Memorial Day. From 2000 until 2022, gas prices tended to increase by about 50 cents from the seasonal low at the beginning of February to the seasonal high in mid-May.
However, even past what NACS referred to as the “unique” conditions of 2021, 2022 has proven to be an even more tumultuous year for gas and energy costs. The traditional forecasts for gas prices have been impacted by a range of factors from inflation in the US to the war in Ukraine, reflected in drastic and sometimes unseasonal fluctuations. For example, instead of that 50-cent difference from February to May, Amarillo gas prices rose by a dollar from the first week of February to the middle of May.
Texas gas prices appeared to peak most recently on June 15, at an average cost of $4.70/gallon across the state. While gas prices generally trended down for the next few months in the state toward an average of $3.18/gallon in mid-September, Amarillo saw an abrupt upshoot over the week of Sept. 15 when prices jumped over 24 cents and nearly erased a month of downward progress.
In Amarillo’s case, the city’s prices stood as an outlier in the region. Judy Stark, the president of the Panhandle Producers & Royalty Owners Association (PPROA), cited several possible sources for the jump at the time, ranging from COVID-19 impacts, the conflict between Russia and Ukraine, supply chain issues, and each individual company having the right to sell gasoline at any price they choose.
Stark’s listed factors could provide insight into the apparent volatility of gas prices even as producers switch to a less expensive blend. Further, at the start of October, another impacting factor piled onto the list when major oil-producing countries decided to slash the amount they would deliver to the world economy.
As previously reported by the Associated Press, the OPEC+ alliance’s decision to cut 2 million barrels per day beginning in November was made in an effort by Western allies to cap oil money flowing into Russia after its invasion of Ukraine. While in reality, the production cuts will amount to about 1.2 million barrels a day, due to some OPEC+ countries not being able to meet quotas, Rystad Energy’s Jorge Leon told the AP that it’s still going to have a significant effect on prices.
Higher oil prices are likely to make inflation worse and exacerbate the ongoing European energy crises tied to natural gas supply cutbacks. Adding the rising oil prices onto seasonal increases in the need for heating, electricity, and other gas-related functions, the expert outlooks on inflation, the global economy, and prices at the gas pump don’t appear optimistic.
Unfortunately, the broader negative outlook for oil costs and inflation could also mean that the “Winter Gas” price cuts for 2022 have a negligible effect on pressures at the pump. While in more traditional years the fuel blends have provided noticeable relief for gas prices, other factors in 2022 may have outweighed their specific impact.
Saving on gas in any weather
Aside from betting on seasonal impacts for prices, there are year-round methods to save on gas, including:
Comparing prices within cities and neighborhoods
As previously noted by Stark to MyHighPlains.com, each individual company has the power to choose how much it charges for gasoline. This can contribute to cities having a range of prices within their limits. Different apps and websites like Google Maps or GasBuddy can show generally-updated gas prices in a user’s current area, which may help make strategizing where to stop and fill up easier.
Using gas station apps or websites
In the same vein as price-checking within the area, drivers can also use apps, such as those from GasBuddy or AAA, to check prices as well as reviews for different stations. A number of apps also offer specific gas cards or cashback rewards for users and are free to download and use. Grocery stores also sometimes offer these programs for members, like Sam’s Club.
Strategizing ways, and days, to pay
Gas prices tend to fluctuate daily, as well as weekly and seasonally. On a day-to-day level, sources like GasBuddy have advised that it’s better to fill up the gas tank earlier in the week. In Texas in 2021, for example, the best day to buy gas was Sunday. While Monday or Friday were generally decent options, it appeared that Texas drivers saved more when they favored visiting a gas station to round out their weekend errands.
According to the NACS, gas prices can also vary depending on the way a person pays. Whether they’re using a rewards or membership card aside, the price can fluctuate depending on whether or not a person is using a credit card, debit card, or cash to pay. That can be because of processing payments for cards, or general incentives put in place by companies to encourage customers to pay with cash.
For example, as noted by NACS, a typical range in fees for a $3/gallon, 10-gallon fill-up could look like this:
- Cash payments: No fees.
- Debit card payments: For regulated debit cards, about 2.4 cents per gallon. While debit cards can often be charged the same as the “cash” price, fees can range toward around 2% of the total transaction cost.
- Credit card payments; 7.5 cents per gallon in extra expenses, including “swipe fees” and variable costs. On average, these fees tend to amount to about 2.5% of the total transaction cost.
Adjusting driving habits
- Maintaining cars and tire pressure according to manufacturer recommendations, often included regular service and air checks;
- Slowing down and following speed limits;
- Avoiding hauling heavy cargo and otherwise removing excess weight;
- Avoiding excessive idling;
- Using cruise control;
- Avoiding “aggressive” driving habits like rapid acceleration and braking.
Altogether, gas prices in 2022 have proven less predictable than in most recent years. However, considering the base factors of gas prices and the aspects of purchasing gas that consumers can control may help minimize the impact of broader tumult and supply issues on day-to-day expenses.