Patrick De Haan, head of petroleum analysis at GasBuddy, joins TheStreet to discuss why prices at the pump are more expensive in the summer.
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00:00 Can you explain why summer gas is more expensive than winter blend gasoline?
00:05 A lot of what is in winter gasoline is more volatile.
00:09 Butane being the key difference here.
00:11 Winter gasoline has a lot more butane.
00:13 Butane is plentiful, it's cheap, it's really going for less than a dollar a gallon and
00:18 when you put so much butane in that winter gasoline, you basically pull down the price.
00:23 Now in summer, there are different oxygen that's replacing butane.
00:27 Butane is one of those things that's more volatile, it doesn't work as well in warmer
00:31 weather and it causes more emissions.
00:33 So butane comes out, there are other oxygenates to replace it, those oxygenates generally
00:39 more expensive and thus the price.
00:41 But half of it really is not the difference in components, but it's the logistical challenge
00:46 of getting these summer blends to where they need to go.
00:49 There are multiple different blends in use.
00:53 Some states have several different blends of summer gasoline.
00:55 So the other part of it is a logistical challenge to supply all of these blends.
01:01 As we're having this conversation, Patrick, towards the end of the month of February,
01:05 is it your expectation that we will see gas prices continue to go higher in the weeks
01:09 and months ahead, I wonder?
01:12 I think that at least for now, we've seen a little bit of a pullback in the price of
01:16 wholesale gasoline.
01:17 I think mid-February, we shouldn't see the biggest increases.
01:21 But once we start to get to March and April, really kind of the climax of refinery maintenance
01:26 and that transition over to summer gasoline, I do expect some pretty noticeable increases.
01:31 Though I think that by the time Memorial Day rolls around, we should start to see prices
01:35 cooling still between now and then.
01:37 We could see increases of anywhere from 25 to 50 cents a gallon.
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