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Do gasoline prices go up before long weekends?

As much as we love our long weekends, the longstanding complaint is gas prices will go up and the weather will be lousy.

True to Murphy’s law, gas prices jumped up prior to the Easter long weekend. We were on holidays driving south to Salt Lake City where prices in the US also jumped.  As we were driving, even I jumped on the bandwagon asking my wife why gasoline prices always went up before long weekends.  My wife replied “So they really go up before a long weekend?  How do you really know?  do you have some statistics?”

She shut me up pretty quick so when I got back, I decided to really see if this was a trend or just a reason to complain.

Finding data

The first step was to find data.  I came across The Kent Group, who provides a broad range of data, research, analysis, and consulting services to the downstream (refining and marketing) petroleum industry.

They have an amazing database of gasoline prices going back to 1987.  Using their data for average weekly retail prices including tax, I summarized data for the past 7 years based on my home city of Edmonton.

Year

Low

Average

High

2012

97.5

105.6

118

2011

96

107

122

2010

86

90.5

102

2009

68

86

93

2008

68

108

131

2007

76

97

117

2006

78

91

111

My five cents

You can interpret data different ways but here are some of my observations:

  • When I looked at the data, I could not tell if prices increased prior to long weekends but I did notice that May and October seemed to have the highest gas prices in the year.
  • Gas prices at the pump are highly volatile in the year.  Little price spikes and drops are a regular occurance.
  • There is a distinct trend in rising gas prices over the years.
  • When looking at average prices it looks like 2011 was the biggest absolute (16.5 cents) and percentage increase (18%)
  • 2008 seemed to be a strange spike probably due to the world financial uncertainty

In some other data from a CBC article, the components of the pump price has changed and evolved over time as well.  10 years ago, the price of gas was 59.4 cents and here’s the breakdown of cost:

  • 49% went to taxes
  • 34% went to crude costs,
  • 11% went to operating margin
  • 6% went to marketing

10 years later in February 2012, the cost of gas was 127 cents.  Here’s some interesting changes to the breakdown:

  • Although the percentage that goes to taxes decreased to 31%, the overall revenue still increased by almost 10 cents per litre
  • Cost of crude has risen dramatically and represents the highest component of the price.  53% of the price results from the cost of crude which has tripled over the 10 years.
  • The cost of crude seems to have the biggest influence over changing prices at the pump.

I have not tallied up the receipts for gasoline on our trip but I am certain the total cost of gas was well under $400 despite the spike in prices just prior to our departure.  In the end, I won’t complain about that considering flights for a family of 6 would have cost me over $3500.  With this perspective, I think gas was a bargain.

What do you think about the price of gasoline at the pumps?

Comments

  1. BeatingTheIndex

    The price of gasoline at the pump definitely sees manipulation particularly right before a weekeend or a holiday. Anyone who says otherwise is only fooling himself.

  2. Murray Armitage

    You didn’t answer the question. You gave a lot of interesting data, but did not answer the question. Do gas prices go up before every long weekend. The only way to check that is to track the increases and decreases and compare the dates with statutory holidays. If that hasn’t been done so far, then it needs to be tracked going forward. I can tell you from my experienec that it has increased within 3 days prior to a long weekend on almost every one for the last 7 years. (No data to back it up, only paying attention.) There have been the occasional exception – maybe 3 in 7 years.

    Murray

    • Jim Yih

      Hey Murray,
      Thanks for the comment and you are correct, I did not directly answer the question so here it goes… The data from The Kent Group suggests that prices to not jump just because a long weekend comes. The is little correlation from the data. I mentioned in my post that spikes seemed to happen in May and October but that’s not directly associated with long weekends.

      Another member company of the Kent Group, MJ Ervin and Associates also did some research on this topic. Here’s what they said about gasoline prices “Prices for gasoline do tend to increase in the summer months when consumers travel more and the demand for gasoline increases. Consumers may pay closer attention to gasoline prices when they fill up before or during a long weekend trip, however industry data shows no such pre-long weekend price increase trend.”

      It was fun to complain but it appears to be more of a myth than a truth.

    • Ryan Paredez

      I haven’t really thought about this, but I don’t see why companies wouldnt. We don’t have a choice in the matter of not getting gas. People travel a lot around the holidays.

      As a business mover for them its great, but sucks for us. Unless you fill up the weekend before and fill up some reserve tanks to make up for the gas you used during the week?

  3. Murray Armitage

    In particular the big family holidays are impacted the most – Easter, Thanksgiving, Christmas – with May long weekend, July 1, August long weekend and Labour Day weekend following closely. Christmas in particular tends to see the price spike remain until about a week after New Years.

  4. Dean

    The spikes in May and October are probably associated with the change from summer to winter gasoline, and vice versa.

  5. anna edwards

    This is not true as the prices definitely go up every week, not just long weekends, on Wed nite or thurs morning and drop again by the next week. Simply it is greed against the consumer and family time, without any recourse available to them. It is so consistant and totally a rip-off. Who can give an honest answer to this pro edure.

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