How Predictable are Higher Gas Prices?

Photo by Erik Reyna for KUT News.

Is it that time of year again already? Everybody's talking about pain at the pump.

There’s been lots of finger pointing over gasoline prices going up over the past few months. Some attribute the price jump to international instability, others say oil speculators are gaming the system. Republican presidential hopefuls, not surprisingly, are blaming the President.

But have we seen this before?

Today, an article in the Washington Post cites an emerging trend: each year when spring rolls around, the price at the pump escalates. The Post cites a couple of reasons:

“Demand for gasoline tends to drop off in winter. That makes it the perfect time for refineries to get ready for summer, when the objective is to produce as much fuel as possible. The catch is that the refining industry’s version of spring cleaning causes supplies to shrink and prices to rise.”

“To comply with the Clean Air Act and limit smog, refiners have to make a special blend of gasoline that doesn’t easily evaporate in the warm summer air. The fuel is 5 to 15 cents a gallon more expensive to make because of raw material costs.”

Still, that pattern of springtime increases might not entirely account for the dramatic jumps we’ve seen this year. And many experts think this could just be the beginning. John Hoffmeister, former CEO of Shell Oil Company, said at a conference in February gasoline would likely hit $5 a gallon due to global demand — and the U.S. needed to aggressively drill for more oil supplies.