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Here’s why Texas gas prices may drop soon

Amarillo, Texas (KAMR/KCIT) — Gas prices tend to hit sometime in September as weather in the US cools and many expect seasonal increases in home heating costs. Some look forward to seasonal declines. October.

However, as the world continues to navigate disruptions in supply chains and production strategies caused by COVID-19, Russia’s invasion of Ukraine, OPEC+ alliance announcements of upcoming production cuts, and other factors, the cost of daily errands is rising. Things like grocery shopping and filling a gas tank are becoming increasingly unpredictable.

What seasons do gas prices change? What causes seasonal gas price fluctuations? How likely is it that things will change in 2022?

What is “winter gas”?

Gases have a certain level of “Reed Vapor Pressure” or RVP, which affects the rate of evaporation. According to the Environmental Protection Agency, this is a measure of gasoline’s volatility. Gases with a higher amount of RVP will ignite and evaporate faster. This can have different effects depending on environmental factors such as weather. For example, in cold weather, a higher RVP benefits because the gas ignites and the car starts more easily. However, at high temperatures, unwanted amounts of gas can burn and evaporate from the fuel system, increasing atmospheric emissions and smog.

Because of the impact of RVP levels on emissions and fuel economy, as noted by GasBuddy and the Texas Environmental Quality Commission, a series of federal and state regulations dictate how much RVP gas is consumed at certain times of the year. Guidelines have been established for how much can be held. This means that after a certain date, producers and sellers will have to offer gas made using a different formula. Generally, this translates into “winter gas” with a higher butane content. This is an important factor for RVP due to its volatility.

Most of these federal guidelines focus on the May 1 through September 15 timeframe. However, some areas, such as East Texas and Arizona, have extended their federally approved summer ozone season, allowing it to start a little later in the year. .

In Texas, the Regional Low RVP Gasoline Program mandates the use of low RVP gasoline in 95 Central and Eastern Texas counties during the summer months when ozone pollution is at its worst. As noted in the TCEQ, gas sold in these counties must have an RVP of “7.8 pounds per square inch (psi) or less” from June 1 through October 1 of each year. not. Gas suppliers are required to supply low RVP gas to these counties from May 1 through October 1 of each year.

Low RVP gas is colloquially called “summer gas”. The U.S. Energy Information Administration manufactures summer-grade gasoline because it must be treated differently to achieve lower RVPs and comply with other readjusted gasoline regulations that may vary by region. He pointed out that the refiner cost per gallon would be higher to do so.

The name “winter gas”, on the other hand, derives from the formula for the gas that is commonly used and produced outside the May-October season of each year, and is highly volatile, making it energy-efficient. It is generally believed that colder climates are more efficient as it means less consumption. It had to be ignited to complete a task such as starting the engine.

How will ‘winter gas’ affect gas prices?

The National Association of Convenience Stores has published a note on its website regarding seasonal gas price fluctuations, focusing on the first half of this year, but the generally anticipated switchover from “summer gas” to winter grades. It also provided insight into the impact of formula.

Refineries tend to schedule “turnarounds” or maintenance during periods of lowest gas demand, such as January and February. NACS noted that while the turnaround period is used for maintenance, overhaul, repair, and inspection operations, refineries are also taking opportunities to reorganize for different seasonal grade fuel production.

Summer blended gas is not only necessary, but also expensive to produce, with different expectations depending on the region. According to NACS, this will lead to an annual turnaround period as the refinery works to make as many formulas as possible, with seasonal extra supplies and periodic increases in demand for fuel expected to begin February 2. May said it will contribute to price increases over the month.

On the other hand, at the end of September in the ‘summer gas’ season, one would normally expect a welcome reduction in gas prices. As gas demand declines seasonally and temperatures begin to cool, retailers often switch to selling “winter gas” around his mid-September. Low demand as well as easy-to-make winter blends have contributed to lower gas prices.

When will gas prices be the lowest this winter?

As noted by NACS, gas prices are traditionally lowest in the first week of February, peaking just before Memorial Day. From 2000 to 2022, gas prices tended to rise by about 50 cents from his early February seasonal low to his mid-May seasonal high.

But even past what NACS called 2021’s “unique” situation, 2022 is proving to be an even more volatile year for gas and energy costs. Conventional forecasts for gasoline prices have been influenced by a variety of factors, from US inflation to the war in Ukraine, and are reflected in dramatic, sometimes out-of-season fluctuations. For example, gas prices in Amarillo have risen $1 since February, instead of a difference of 50 cents from February to May. 1st week of February To Mid May.

gas prices in texas The most recent peak appears to have been on June 15th. It costs an average of $4.70/gallon statewide. Gasoline prices in the state generally trended downward in mid-September toward an average of $3.18/gallon for the following months, but Amarillo saw a sharp rise in the week of Sept. 15, with prices jumped over 24 cents and progressed downwards.

For Amarillo, city prices were an outlier for the area. Judy Stark, President of the Panhandle Producers and Royalty Owners Association (PPROA), said: Listing several possible sources of jumps at the time, The impact of COVID-19, the conflict between Russia and Ukraine, supply chain issues, and the right of individual companies to sell gasoline at any price they choose.

Stark’s enumerated factors may provide insight into the apparent volatility of gas prices, even as producers switch to cheaper blends. Another influencing factor piled up on the list when we decided to cut supplies to the global economy.

As The Associated Press previously reported, the OPEC+ alliance’s decision to cut 2 million barrels per day from November was made to limit oil money flowing into Russia after Western allies invade Ukraine. In practice, production cuts will amount to about 1.2 million barrels per day as some of his OPEC+ members fail to meet their quotas, Rystad Energy’s Jorge León told his AP. , said it would still have a significant impact on prices.

Rising oil prices could exacerbate inflation and exacerbate the ongoing European energy crisis linked to cuts in natural gas supplies. Expert outlooks for inflation, the global economy and gas pump prices do not seem optimistic as demand for heating, electricity and other gas-related functions increases seasonally, in addition to rising oil prices.

Unfortunately, the broader negative outlook for oil costs and inflation could also mean that the 2022 “winter gas” price cut will have little impact on pump pressure. In more traditional years, fuel blending has provided a notable easing in gasoline prices, but other factors may have outweighed certain impacts in 2022.

Save gas in any weather

Besides betting on the seasonal impact of prices, there are other ways to save on gas throughout the year, including:

Compare prices in cities and neighborhoods

As Stark previously pointed out to MyHighPlains.com, individual companies have the power to choose their gas prices. This can help cities with price ranges within limits. Google maps or gas buddy can display generally updated gas prices for the user’s current region. This helps you strategize where to stop and refuel.

Use of gas station apps and websites

Similar to price checking in the area, drivers can also use apps like GasBuddy and AAA to check prices and reviews of various stations. number of apps It also provides users with specific gascard or cashback benefits, free to download and use. Grocery stores may also offer these programs for members, such as Sam’s Club.

Strategize payment methods and payment dates

Gas prices tend to fluctuate daily, weekly, and seasonally. On a daily level, Sources like GasBuddy advise This means that you should fill up your gas tank early in the week. For example, in Texas in 2021, the best day to buy gas was Sunday. Monday or Friday was generally a decent choice, but Texas drivers seem to have saved more if they preferred to visit a gas station to wrap up their weekend errands.

according to NACS, the gas fee also depends on the payment method. Apart from whether you are using a rewards or membership card, prices can vary depending on whether you are paying with a credit card, debit card or cash. This may be due to card payment processing and the general incentives businesses have put in place to encourage their customers to pay with cash.

For example, as noted by NACS, a typical range of charges for a 10 gallon refueling of $3 per gallon would be:

  • Cash payment: no fees.
  • Debit Card Payments: Approximately 2.4 cents per gallon for regulated debit cards. Debit cards can often charge the same amount as the “cash” price, but the fees can be around 2% of the total transaction cost.
  • Credit card payment; 7.5 cents per gallon for additional charges including “swipe fee” and variable charges. On average, these fees tend to be around 2.5% of total transaction costs.

Adjustment of driving habits

AAA and the U.S. Department of Energy We have published many tips for more efficient gas usage, mostly focused on your driving habits. Some efficiency tips include:

  • Maintain vehicle and tire pressure according to manufacturer’s recommendations. They often include regular servicing and air checks.
  • Slow down and obey speed limits.
  • Avoid carrying heavy cargo and get rid of excess weight.
  • Avoid excessive idling;
  • use of cruise control;
  • Avoid “aggressive” driving habits such as hard acceleration and hard braking.

Overall, gas prices in 2022 are proving to be less predictable than in recent years. However, considering the underlying drivers of gas prices and the aspects of gas purchases that consumers can control may help minimize the impact of wider disruptions and supply problems on their day-to-day costs.

https://www.kxan.com/news/texas/heres-why-texas-gas-prices-may-soon-drop/ Here’s why Texas gas prices may drop soon

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