Prices of gasoline go up each spring or early summer because of EPA mandated blend change for the warmer weather driving. Changing the blends requires shutting down the refineries for a few days. The cash flow lost in a few days of downtime in a piece of equipment as expensive as a refinery is staggering. As with all comsumer items, any time that our government intervenes in private industry to protect us, all additional compliance costs have to be passed on to the ultimate consumer. Every time!! So, the price of the summer blends goes up to capture the additional costs of the summer blends so that the refineries do not sustain a loss. In the fall, the refineries switch back to the much longer winter season and their less expensive blends.
I used to work in corporate for an oil company that had 5 refineries, so I know what I am talking about.
BTW, Gordon is exactly right on the price of motor oil. The contracts to purchase the oil for retail were more than likely entered into about a year ago. What we see is the resulting lag. Hopefully, you have a supply of oil and can wait until the retail prices go back down due to more recent supply contracts with wholesalers. When it does go down, stock up!!
