Why Do Gas Prices Go Up in the Summer?

Gasoline prices often increase during the summer months, influenced by predictable seasonal factors and broader market dynamics. Seasonal shifts contribute significantly to these price changes, but non-seasonal elements also cause volatility throughout the year.

Seasonal Patterns in Gas Prices

A primary reason for the rise in gasoline prices during summer stems from increased consumer demand. As warmer weather encourages more travel, vacations, and road trips, fuel demand generally climbs. The U.S. Energy Information Administration (EIA) indicates that gasoline demand peaks in the summer, with Americans projected to drive approximately 35 billion miles more than in winter, directly correlating with increased fuel consumption.

Another significant factor is the mandated transition to “summer-blend” gasoline. The U.S. Environmental Protection Agency (EPA) requires this special formulation to reduce evaporative emissions of volatile organic compounds (VOCs) that contribute to ground-level ozone, or smog, during hotter temperatures. Summer-blend gasoline has a lower Reid Vapor Pressure (RVP), meaning it is less prone to evaporating in high heat. This refining process is more complex and costly, requiring the removal of more volatile components like butane. This results in a lower yield of gasoline per barrel of crude oil and increases production costs by as much as 15 cents per gallon.

Refineries typically schedule maintenance during the spring, often from February through April, when fuel demand is lower. These planned shutdowns, known as “turnarounds,” allow refineries to perform necessary upkeep and retool for summer-blend fuels. These maintenance periods temporarily reduce gasoline supply, creating upward pressure on prices just as summer demand begins to rise. The regulatory compliance deadline for terminals to fully purge winter-blend fuels, often around May 1, further contributes to price increases as inventories adjust.

Factors Influencing Gas Prices

Beyond seasonal patterns, the retail price of gasoline is shaped by several major components. The cost of crude oil is consistently the largest contributor to the price consumers pay at the pump, often accounting for approximately 49% to 70% of the total cost. Global supply and demand dynamics, geopolitical events, and decisions by organizations like the Organization of the Petroleum Exporting Countries (OPEC) significantly influence crude oil prices. Disruptions from natural disasters or political instability can lead to rapid shifts in crude oil costs.

Refining costs represent the expenses associated with processing crude oil into finished gasoline products. These costs include the energy required for operations, labor, and specific processes needed to meet various fuel specifications, such as summer blends or cleaner-burning formulations. Refining margins can fluctuate based on the type of crude oil used and the refinery’s technological capabilities.

Distribution and marketing costs encompass the expenses of transporting gasoline from refineries to retail stations and the operational overhead of the stations themselves. This includes pipeline transportation, tanker truck deliveries, storage, and profit margins for wholesale marketers and station owners. Retailer profits range between 5 and 10 cents per gallon.

Taxes also constitute a notable portion of the retail gasoline price. The federal excise tax on gasoline is 18.4 cents per gallon. In addition to the federal levy, state and local governments impose their own excise taxes, which vary significantly across the United States, averaging around 32 to 38 cents per gallon. Some jurisdictions also apply a general sales tax to gasoline purchases, further contributing to the final price.