Why Fall Brings Cheaper Gasoline

Gasoline prices usually fall after summer, and not just because demand drops. Today, I explain the factors that typically lead gasoline prices to trend down as fall arrives.

Fall arrives next month. Along with it comes relief from the heat, and usually at the gasoline pump as well. 

It isn’t simply that demand for gasoline drops after summer driving season. Gasoline is also cheaper to produce after summer, for reasons I explain below.

There are many different recipes that can be used to make gasoline, but the final product has to meet certain specifications. One of those is related to how quickly the gasoline evaporates, and that is influenced by the composition and the ambient temperature.

Regulating Smog

Gasoline vapors contribute to smog, so the Environmental Protection Agency (EPA) regulates gasoline blends by putting seasonal limits on the Reid vapor pressure (RVP). The RVP specification is a measure of the tendency to evaporate; the higher the vapor pressure the faster the evaporation rate.

Normal atmospheric pressure is around 14.7 lbs per square inch (psi) at sea level. As liquids are heated, the vapor pressure of the liquid rises until it reaches atmospheric pressure — at which point it boils.

Thus, vapor pressure is a function of both the substance and its temperature. Under normal atmospheric temperatures water is a liquid because its vapor pressure is well below 14.7 psi. It still evaporates (i.e., it still has a vapor pressure), but slowly.

The same phenomenon applies to gasoline. As the temperature increases, the vapor pressure rises. Thus, if gasoline blends remained exactly the same from winter to summer, the evaporation rates in summer would be much higher. That would greatly increase smog.

So, EPA lowers the RVP requirement for gasoline in summer. The specific limit varies from state to state (and tends to be more restrictive in congested areas and warmer locations), but 7.8 psi is a common RVP limit in much of the U.S. in the summer months.