The price of gasoline in Oklahoma City has jumped 23 cents over the past month and is likely to continue higher as the country’s refineries prepare to begin producing cleaner-burning and more expensive summer-blend fuels.
“The anxiety over the switch has commenced,” AAA Oklahoma spokesman Chuck Mai said. “As far as I can determine, that’s the reason for the price rise, along with oil inching upward.”
The average price for a gallon of regular unleaded gasoline in the metro area reached nearly $3.28 Thursday, up 3.5 cents over the past week and almost 23 cents over the past month, according to GasBuddy.com. The price is still 28 cents lower than it was one year ago.
Nationwide, the average price hit $3.43 Thursday, up a nickel on the week and 16 cents over the past month.
GasBuddy analyst Gregg Laskoski agreed that most of the reason for the price hike is because refineries are preparing for the summer fuels.
“Across most of the country, the vast majority of winter-blend gasoline has been depleted,” he said. “Refineries are looking to shut down operations to take care of maintenance. Most are already into the normal turnaround schedule.”
During the winter months, the country’s refiners produce a less-expensive blend of gasoline. By late spring, they must complete the process of converting refineries to producing the cleaner-burning summer fuels.
If all goes well, the process usually takes about two weeks. But refiners increasingly are starting early.
“Typically, they have to gear down the refinery, clean it out and ramp back up again to produce summer grade fuels,” Mai said.
“But it’s like anything else where once you get into it, oftentimes they find other problem, as well, which delays the process. It’s like when you take your car in for a burned-out light bulb and discover you need a new transmission.”
All in the chemistry
One difference between winter and summer gasoline blends has to do with Reid Vapor Pressure, or RVP. Fuels with higher RVPs evaporate more easily, a characteristic that is needed in the winter when temperatures are lower.
For the summer months, however, lower RVPs are preferred because they burn cleaner.
The U.S. Environmental Protection Agency requires 11 grades of summer blended fuel to be used in various parts of the country, based on localized air quality.
California requires two additional blends that create fewer emissions than those established by national standards.
“It’s not a one-size-fits-all situation like the winter grades,” Mai said.
“Very specific blends are used in very specific areas.”
The situation can lead to localized price spikes if problems arise with refineries tooled to service certain areas because other refineries might not be able to make up for the lost production.
Most industry observers expect gasoline prices to continue to increase at least for the next few weeks.
“What we’re seeing is fairly typical for this time if year,” Laskoski said.
“This year, I think we will see prices continue to climb incrementally from now until April. We might be looking at a 40-cent increase by then.”
Mai said he expects a similar pattern, but that Oklahoma’s prices likely won’t climb as high.
“Our price in Oklahoma might top out at around $3.35 or $3.40,” he said.
“I’d be surprised if it got to much more than that.”