U.S. Gas Prices Are Up Sharply; Experts Say Why
Local gasoline prices increased dramatically on Wednesday — in some cases to levels almost 30 cents higher for a gallon of regular unleaded gasoline than a week earlier.
Similar price jumps were seen across the nation.
The local increases resulted in several calls to The Greeneville Sun from concerned motorists here.
When a Sun staffer checked prices Wednesday at 14 local gasoline stations the newspaper monitors weekly, he found that prices at nine of the stations, representing a variety of brands, had risen to $2.49.9 per gallon for regular unleaded gasoline.
The lowest posted per-gallon price found on Wednesday when the spotcheck was made was $2.29.9 per gallon at the Phillips 66 market on West Summer Street.
Two other local stations showed posted prices on Wednesday of $2.39.9 per gallon for regular unleaded gasoline. Another displayed $2.41.9 per gallon as its price for regular unleaded gasoline.
When similar checks were made a week earlier, on March 8, prices for a gallon of regular gasoline ranged from a low of $2.20.9 to a high of 2.24.9 at the same 14 local gasoline retailers.
Local gasoline prices were considerably lower on March 1, according to the Sun’s weekly survey of the same 14 stations. On March 1, nine of those stations were selling a gallon of regular gasoline for $2.16.9, while five stations were selling it for $2.15.9. Seasonal Fuel Changes Blamed
Contacted for comment about the increases on Thursday morning, Emily LeRoy, associate director of the Nashville-based Tennessee Oil Marketers Association (TOMA), said the state’s gasoline retailers are just as frustrated by the increases as are consumers.
“Ninety percent of retailers in Tennessee are locally-owned,” she said. “They purchase fuel from major producers, and they are not in control of the (gasoline) prices.”
LeRoy said she feels the primary reason for the increases is the federally required transition that currently is being made by petroleum refiners from “winter” to “summer” blends of gasoline.
She noted that refiners must produce 33 different specialty fuels nationwide to reduce air pollution during the warm summer months. Refiners, she said, must complete the transition to the “summertime fuels” by April 15.
“What you’re seeing is the annual ‘turnover’ in the fuel supply,” she said. “Every year, gasoline prices go up in the spring.”
Don Lindsey, public affairs director for AAA East Tennessee, the regional affiliate of North America’s largest motoring and leisure travel organization, echoed LeRoy’s comments that the transition to summer gasoline blends is behind the increases in gasoline pump prices.
“In this very week last year, we were setting (price) records every day,” he said, noting that the changeover to summer fuel blends takes refineries temporarily out of service and tightens gasoline supplies.
He described the increases as having been an “annual event” this time of year for the past four to five years.
“What tends to happen, and what we hope will happen again this year, is that prices will drop again as we get closer to summertime,” he said.
An ‘Expensive Process’
He described the transition to summer blends of gasoline as an “expensive process,” that requires the pipes and other equipment in refineries to be flushed and other changes made before the refineries can begin production of gasoline blends designed to fight air pollution during summer months.
But traditionally, Lindsey said, gasoline prices have dropped in May and June.
“If it follows the pattern we’ve seen before, prices will drop,” he said.
He added, however, that, because of increased crude oil prices, it is unclear if the traditional pattern will continue this year.
Different Fuels Required
According to TOMA, while most areas of Tennessee are supplied with a standard form of “summer gasoline,” refiners must supply different low Reid Vapor Pressure (RVP) varieties of gasoline to the Nashville, Knoxville and Memphis markets. The varieties are designed to reduce warm weather air pollution.
Reid Vapor Pressure (RVP) is a measure of evaporative emissions from gasoline during the summer months when ambient temperatures are their highest, according to the Web site of the California Environmental Protection Agency. RVP, according to the Web site, is measured in pounds per square inch (psi).
A gasoline blend with a lower RVP rating will tend to emit lower amounts of vapors into the air during the summer months, according to the Web site.
“Over the years, the EPA has allowed the states to carve out little areas that require different fuels,” she said. “That adds to refining and transportation costs.”
In addition, she said, refiners have been required by the U.S. Environmental Protection Agency (EPA) to start selling new “low-sulphur” blends of gasoline that have added to fuel costs.
“Also, the industry is getting ready to produce a new “very low-sulphur diesel fuel” that will be phased in over the next three years.
LeRoy said refiners now must produce three different types of diesel fuel, including the “dyed” form approved for agricultural uses only, a requirement that further drives up costs.
Other Factors
Other factors that tend to drive gasoline prices upward include the cost of crude oil and anything that tends to reduce refining capacity, industry experts say.
For example, gasoline “futures rose” 12.27 cents on the New York Mercantile Exchange on Wednesday after Amerada Hess Corporation, an independent energy company, unexpectedly shut down a refinery it operates in St. Croix in the U.S. Virgin Islands for repairs on Tuesday, The Associated Press reported.
The St. Croix unit, which refines about 150,000 barrels of crude oil every day, should be fixed within two weeks, an Amerada Hess spokesman told the AP.
Brokers also said gas prices are rising because refiners are in their “turnaround season,” a period when they shut down their refineries to perform maintenance before the summer traveling season nears, an AP article noted this week.
The temporary closure of refineries tightens the gasoline supply, which causes prices to increase, according to AP.
GreenCounty
Similar price jumps were seen across the nation.
The local increases resulted in several calls to The Greeneville Sun from concerned motorists here.
When a Sun staffer checked prices Wednesday at 14 local gasoline stations the newspaper monitors weekly, he found that prices at nine of the stations, representing a variety of brands, had risen to $2.49.9 per gallon for regular unleaded gasoline.
The lowest posted per-gallon price found on Wednesday when the spotcheck was made was $2.29.9 per gallon at the Phillips 66 market on West Summer Street.
Two other local stations showed posted prices on Wednesday of $2.39.9 per gallon for regular unleaded gasoline. Another displayed $2.41.9 per gallon as its price for regular unleaded gasoline.
When similar checks were made a week earlier, on March 8, prices for a gallon of regular gasoline ranged from a low of $2.20.9 to a high of 2.24.9 at the same 14 local gasoline retailers.
Local gasoline prices were considerably lower on March 1, according to the Sun’s weekly survey of the same 14 stations. On March 1, nine of those stations were selling a gallon of regular gasoline for $2.16.9, while five stations were selling it for $2.15.9. Seasonal Fuel Changes Blamed
Contacted for comment about the increases on Thursday morning, Emily LeRoy, associate director of the Nashville-based Tennessee Oil Marketers Association (TOMA), said the state’s gasoline retailers are just as frustrated by the increases as are consumers.
“Ninety percent of retailers in Tennessee are locally-owned,” she said. “They purchase fuel from major producers, and they are not in control of the (gasoline) prices.”
LeRoy said she feels the primary reason for the increases is the federally required transition that currently is being made by petroleum refiners from “winter” to “summer” blends of gasoline.
She noted that refiners must produce 33 different specialty fuels nationwide to reduce air pollution during the warm summer months. Refiners, she said, must complete the transition to the “summertime fuels” by April 15.
“What you’re seeing is the annual ‘turnover’ in the fuel supply,” she said. “Every year, gasoline prices go up in the spring.”
Don Lindsey, public affairs director for AAA East Tennessee, the regional affiliate of North America’s largest motoring and leisure travel organization, echoed LeRoy’s comments that the transition to summer gasoline blends is behind the increases in gasoline pump prices.
“In this very week last year, we were setting (price) records every day,” he said, noting that the changeover to summer fuel blends takes refineries temporarily out of service and tightens gasoline supplies.
He described the increases as having been an “annual event” this time of year for the past four to five years.
“What tends to happen, and what we hope will happen again this year, is that prices will drop again as we get closer to summertime,” he said.
An ‘Expensive Process’
He described the transition to summer blends of gasoline as an “expensive process,” that requires the pipes and other equipment in refineries to be flushed and other changes made before the refineries can begin production of gasoline blends designed to fight air pollution during summer months.
But traditionally, Lindsey said, gasoline prices have dropped in May and June.
“If it follows the pattern we’ve seen before, prices will drop,” he said.
He added, however, that, because of increased crude oil prices, it is unclear if the traditional pattern will continue this year.
Different Fuels Required
According to TOMA, while most areas of Tennessee are supplied with a standard form of “summer gasoline,” refiners must supply different low Reid Vapor Pressure (RVP) varieties of gasoline to the Nashville, Knoxville and Memphis markets. The varieties are designed to reduce warm weather air pollution.
Reid Vapor Pressure (RVP) is a measure of evaporative emissions from gasoline during the summer months when ambient temperatures are their highest, according to the Web site of the California Environmental Protection Agency. RVP, according to the Web site, is measured in pounds per square inch (psi).
A gasoline blend with a lower RVP rating will tend to emit lower amounts of vapors into the air during the summer months, according to the Web site.
“Over the years, the EPA has allowed the states to carve out little areas that require different fuels,” she said. “That adds to refining and transportation costs.”
In addition, she said, refiners have been required by the U.S. Environmental Protection Agency (EPA) to start selling new “low-sulphur” blends of gasoline that have added to fuel costs.
“Also, the industry is getting ready to produce a new “very low-sulphur diesel fuel” that will be phased in over the next three years.
LeRoy said refiners now must produce three different types of diesel fuel, including the “dyed” form approved for agricultural uses only, a requirement that further drives up costs.
Other Factors
Other factors that tend to drive gasoline prices upward include the cost of crude oil and anything that tends to reduce refining capacity, industry experts say.
For example, gasoline “futures rose” 12.27 cents on the New York Mercantile Exchange on Wednesday after Amerada Hess Corporation, an independent energy company, unexpectedly shut down a refinery it operates in St. Croix in the U.S. Virgin Islands for repairs on Tuesday, The Associated Press reported.
The St. Croix unit, which refines about 150,000 barrels of crude oil every day, should be fixed within two weeks, an Amerada Hess spokesman told the AP.
Brokers also said gas prices are rising because refiners are in their “turnaround season,” a period when they shut down their refineries to perform maintenance before the summer traveling season nears, an AP article noted this week.
The temporary closure of refineries tightens the gasoline supply, which causes prices to increase, according to AP.
GreenCounty
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