Money Matters

Is The Holiday Gas Spike Bogus?

BY Liz KnuevenDecember 11, 2018

Filling the gas tank before the prices shoot up on the holidays was established knowledge in my family—as important a tradition as cinnamon rolls on Christmas morning.

But is it bunk?

For so long, I’d taken the notion of higher holiday fuel costs as a reality based in hard-and-fast logic. After all, it makes perfect sense that gas prices would go up when everyone is traveling, right?

But as with Frosty and Rudolph, I know some of the most enduring holiday stories aren’t exactly grounded in fact. So this year, I decided to dig into the issue—and got a Christmas surprise of my own.

Winter Gas Is Different Than Summer Gas—And Cheaper

Okay, so I’ll admit this one was a bit of a mind blow for me. Seriously, am I the only one who didn’t know there was such a thing as winter and summer gas? The difference has to do with how easily the fuel evaporates at a given temperature, since winter-blend fuel has to evaporate at lower degrees for the engine to work.

But it turns out the summer blend is actually more expensive to produce than the cheaper winter blend—an expense that’s then passed along to consumers in the summer. So that means the reality is actually the opposite of my lifelong assumption: we generally go into the winter holiday season seeing prices much lower than at any other time of the year.

Combined with the increased demand of the summer months (the so-called “driving season”), you’ll usually see prices at their highest during summer. So don’t sweat that pre-holiday fill-up.

Gas Prices Are So Political, Man

In any given season, gas prices are unpredictable at best—and 2018 is no different. Especially over the past few months, prices at the pump are truly anyone’s guess.

Earlier this year, analysts predicted there would be big price spikes at the pump after the U.S. pulled out of the Iran nuclear deal and reinstated sanctions on the oil-rich country. And while those sanctions went into effect in November, the predicted production decrease that many thought would send oil prices soaring has yet to materialize.

In fact, that’s far from what actually happened as November brought us our lowest gas prices since April. That’s due both to the switch back to the less-expensive winter blend of gas and because other countries ramped up their oil production to compensate. At any rate, if a broad set of international sanctions is unable to create a spike in gas prices, don’t expect the holiday season to either.

But There’s Always A Little Spike, Right?

Truth is, it depends.

During 2017, AAA reported that Americans saw a two-cent increase in the price of a gallon of gas over the last week of the year compared to the week before. That last week of the year is generally pretty travel-heavy, but obviously had only a minimal impact when compared to other times of the year.

Other times, though, big road-trip weeks seem to have the exact opposite effect.

This Thanksgiving, gas prices plummeted $0.07 per gallon from the week before—the largest one-week price drop reported at the pump this year, according to AAA.

The Bottom Line: Don’t Sweat Holiday Gas Prices

The good news in all of this? You can take filling up on gas off your pre-holiday to-do list. Sure, you might see gas prices go up by a few cents. But it’s equally likely that you might see them fall—which would really make it the most wonderful time of the year.

Either way, don’t be one of those people who talks about trying to “time” the holiday gas market. There’s no reality behind it, and it leaves you sounding like that conspiracy-spouting great uncle you’re glad you only see at the family Christmas party. After, all the holidays are filled with legit worries and hassles. The imagined “holiday gas spike” shouldn’t be one of them.

Get a car on your terms.

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