Summer’s here, and if you’re like many people you’re looking forward to packing your bags, donning your sunglasses and hitting the open road. But then you pass your local gas station. Did the price per gallon jump another nickel since last week? And doesn’t it always seem to spike right around the time when road-trip season begins?
It’s not your imagination
During the summer, gas prices generally do go up. Why? Well, the law of supply and demand certainly plays a major role. Millions of people are on the road, on their way to the beach, to the mountains or to faraway cities and states. But other factors also contribute to “gasflation.”
Predictable supply shortfalls
In early spring, energy companies shut down their oil refineries to conduct routine maintenance. Sometimes these refineries don’t go back online until late May. This reduces supply levels, which drives up wholesale prices, which the oil companies pass down the pipeline along with their maintenance costs, to your local gas station. Which then passes them on to you and me.
The gas is greener
Gasoline is gasoline. It’s the same stuff all year round, right?
Actually, no. Gasoline costs more to produce in the summer. Why?
- Gas evaporates faster in warmer summer air. Faster evaporation increases smog and air pollution. To comply with the Clean Air Act, refiners have to formulate a special blend of gasoline that doesn’t evaporate as easily.
- To tamp down the vapor pressure in your car that increases summer smog, refineries add special components to their summer-grade gasoline mixture.
These added ingredients and processing methods help preserve the environment, but they can add anywhere between 5 to 15 cents to a gallon of gas.
Mother Nature’s price shocks
Since most refineries are located in southern states, they’re generally not severely affected by winter weather events like blizzards and ice storms. But this same region is the summertime hot spot for floods, hurricanes and tornadoes, which can cause major disruptions in the nation’s fuel supply. For example, when Hurricane Harvey hammered Texas in 2017, disabling many refineries, retail gas prices spiked between 12-30 cents within days of the event.
How you can lower your gas bill this summer
While there’s little you can do to affect prices at the pump, you can reduce the overall amount you spend on gasoline by combining good driving habits with savvy price hunting.
- Check your air filter. A clean air filter can improve gas mileage by as much as 10 percent.
- Keep your tires inflated and aligned. Underinflated tires and poor alignment can reduce fuel economy by 1-2 miles-per-gallon.
- Drive more slowly. Every 5 mph reduction in highway speed can reduce fuel consumption by 7%.
- Keep your foot off the brakes. Riding with your foot on the brake pedal will both wear out your car’s brake pads and increase gas consumption.
- Reduce the weight of your car. Empty your trunk, remove any unnecessary items from the seats, and pack as lightly as possible for vacations.
- Use air conditioning economically. Since air conditioning can lower your gas economy by 1-2 miles per gallon or more, try to keep the windows open and the A/C off at lower speeds. But do the reverse when you’re on the highway, since wind-drag from open windows can increase gas consumption more than air conditioning.
- Don’t idle for more than a minute, even when you start your car. Once you turn the key, you don’t need more than a minute to warm your car up. Idling not only wastes gas, but it increases pollution as well.
- Don’t pay more for the brand. Other than price, there’s very little difference between the fuel you buy from “name-brand” gas stations versus gasoline sold by independent stations.
- Use your smartphone to find the best prices. On the road and need a fill up? Apps like Gas Buddy, Waze and Gas Guru help you find the best fuel prices wherever you are.
And last but not least, if you’re not happy with your vehicle’s gas mileage, consider getting a more fuel-efficient vehicle. Today’s hybrid and electric cars and SUVs are far more stylish and fun to drive than they were a decade ago. And not only are they fuel-efficient, but they’re far more environmentally friendly.
Chris Gullotti is a financial advisor located at Canby Financial Advisors, 161 Worcester Road, Framingham, MA 01701. He offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. He can be reached at 508.598.1082 or [email protected]
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