Some Massachusetts gas stations are already seeing the cost for a gallon of gasoline exceed $4, but will that be the norm this summer?
Many gas stations will likely reach that benchmark, and it’s possible the average price for a gallon of gas could exceed $4 per gallon at some point in the next several weeks, Mark Schieldrop, a spokesman for AAA Northeast, told NewBostonPost by email on Tuesday.
“We could see prices in MA reach $4 or higher, but there’s also a decent chance that we’ll end up just shy of $4,” Schieldrop wrote in the email message. “I know that sounds like waffling, but prices will probably waffle a bit between now and the traditional peak for gas prices, which usually happens around mid-June.”
The average cost for a gallon of gasoline in Massachusetts is currently $3.574 per gallon, as of Tuesday, April 23, according to AAA.
While the average cost for a gallon of regular gas on the island of Martha’s Vineyard is $4.44 per gallon and $4.736 on Nantucket, even some mainland spots now exceed $4 per gallon. For example, the price for a gallon of gas is $4.39 per gallon at the Mobil on Lowell Street in Wilmington , $4.78 at the Mobil on East Berkeley Street in Boston ($4.75 with cash), and $4.19 at the Mobil on Commonwealth Avenue in Boston, employees of each gas station told NewBostonPost by telephone. Additionally, a reporter saw that Mobil in Norwell was charging $4.29 per gallon for gas on Wednesday, April 24.
Schieldrop noted that demand for gas will rise in the coming weeks as the temperature warms, so the price will likely increase. However, he doesn’t expect a repeat of 2022, when $5 gas was the norm.
Schieldrop said:
Currently, inventories of gasoline are decent for our region. We’re actually up about 1m barrels of gasoline in the Northeast compared to last year and our domestic refiners are ramping up production on schedule. Meanwhile, demand has been decent, but I wouldn’t say strong. In fact, for many weeks this year, we’ve been seeing demand figures trending just shy of last year when we compare the same weeks year over year. At the same time, oil prices have fallen fairly sharply over the past two weeks, which will help keep a lid on gas prices for the time being. Oil prices did increase about 20 percent since the start of the year but have pulled back, primarly on weak economic forecasts coming out of China – the world’s largest importer of oil. Oil prices are also down as markets digest the ongoing conflict in the Middle East. Much of the runup in oil prices this year was speculative and based on the situation with Israel, but there’s a growing sentiment in petroleum markets that the chance of the conflict spilling over into oil producting countries is limited. That sentiment explains some of the sharp drop in oil prices recently.
Additionally, Schildrop said that gas stations have been switching over to their summer blend of gasoline, which contributes to these added costs.
From June 1 to September 15, the federal Environmental Protection Agency requires gas stations to sell a summer blend that’s more expensive than the gas sold during the rest of the year.
“The difference involves the fuel’s Reid Vapor Pressure (RVP), which is a measure of how easily the fuel evaporates at a given temperature,” AAA’s web site said. “Winter-blend gas has a higher RVP because the fuel must be able to evaporate at low temperatures for the engine to operate properly. Summer-blend gas has a lower RVP to prevent excessive evaporation when outside temperatures rise. That evaporation can cause vapor lock in an engine on hot days and contributes to unhealthy ground-level ozone and smog levels.”
Typically, gasoline contains 10 percent butane, but in the summer months, it contains just 2 percent. That’s because butane burns less efficiently in the warmer weather, making it less environmentally friendly.
“The big spike we saw this week is almost entirely due to the switchover to summer blend fuel, which is more expensive to produce,” Schieldrop said. “Up before the official switchover last week here in the Northeast, summer blend was trading at a 30 percent premium over winter blend. Now that summer blend is stocked at wholesale terminals, we’re seeing that higher price make its way to retail pumps. So I expect prices to stablize where they are and tick up much more slightly each week as we approach the seasonal high sometime in June. We could see prices drift around this range for a while since we’re in a lull demand-wise between spring break and Memorial Day. Once the summer driving season is very close, prices could rise a bit.”
As Schieldrop points out, the cost for a gallon of gas is up 19 cents per gallon over the past week in Massachusetts, according to AAA.
Over the coming weeks, however, he doesn’t expect the price to increase that quickly.
“It’s fairly safe to say we will likely see prices move within a range of about 20 to 30 cents above what the average price is today through June,” Schieldrop said. “Inventories, demand and the price of oil are the three key benchmarks I’ll be looking at each week to see if we’re going to be at the top or the bottom of that range.
“Of course, something unexpected could happen – global conflict, major storms or a refinery disaster – and all bets are off. But if things stay close to the status quo, $4 a gallon could be within reach, but it’s no guarantee,” he added.
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