Gas prices to rise by summer, government says. Gas prices always rise by summer, it’s called seasonal demand variation. But this AP article is more substantive than that (I realize that they are hard-pressed to come up with pithy headlines), discussing how the current supply problems from Venezuela are likely to lead to a higher-than-average increase in retail gasolline prices, because refiners are likely to have trouble buying enough crude oil to meet their production expectations. The retail prices are likely to be highest in the Midwest, because of the combination of three factors:
1. We usually get most of our crude from Venezuela, comin’ up the Mississippi
2. The Midwest is still plagued with refinery capacity constraints, so if there’s a breakdown or an outage we have very little fault tolerance
3. The combination of the federal reformulated gasoline regulations and local boutique fuels, which fragment markets and raise refining costs
So those of us who live here should start living by the great Queen song, “I like to ride my bicycle, I like to ride my bike”.