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.
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.
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?