Summer Fuel Prices

Even though snow is lingering in most parts of Minnesota, the nearing end of school year means families have begun to plan summer road trips, visits to the cabin, and taxiing kids to camps, sports, and other activities. Many families will likely keep an eye on the budget, including fuel costs, as they plan their trips. Luckily, we have good resources for this purpose.

The U.S. Energy Information Administration (EIA) is a federal agency within the U.S. Department of Energy. Aside from collecting and analyzing energy data, one of the roles of EIA is to summarize and disseminate that information in reports such as the Annual Energy Outlook and the Short-Term Energy Outlook. These reports help guide policy and the public on energy-related decisions. These outlooks are more than simple predictions; rather, they are forecasts based on accepted assumptions, modeling, and thorough analysis of available data trends.

Earlier this week, the EIA released the Summer Fuels Outlook, and in this summary, alluded to summer gas prices being higher this year than they’ve been in four years. The outlook expects that on average, households will spend $200 more on fuel than they did in 2017. So why the increase? Most likely you’ve heard talk of the price of a barrel of crude oil, which is a major factor when setting the price of a gallon of gas. However, other factors also affect the price we pay at the pump (learn more about gasoline pricing). For instance, wholesale prices, retail expenses, distribution costs, and federal and state taxes are all added into the price at the pump (visit our blog next Tuesday for more on the Minnesota state fuel tax). The Summer Fuels Outlook also predicts that the price per gallon will peak at $2.79 and average $2.74. News of increasing gas prices can certainly cause some groans and knee-jerk reactions in people, but there are a few ways to spend less on fuel. 

While the price per gallon of fuel is out of our control, one thing we can control is which option we select at the pump. One option is 88 octane gasoline, also known as E15 because it has 15% ethanol blended into each gallon. If you drive a 2001 or newer gasoline vehicle, you can use 88 octane fuel and will typically find that a gallon of 88 octane ranges from 5-10 cents less than a gallon of regular unleaded. If you drive a flex-fuel vehicle, you usually find E85 selling for between 40-70 cents per gallon less than regular unleaded. As the summer miles begin to add up, so can every penny saved by using ethanol blended fuel.

Find out if your vehicle is a flex-fuel vehicle here, then check out E85 price listings in Minnesota.

Read our blog next week Tuesday for more information about Minnesota state fuel tax, and some reasons why ethanol is less expensive. 

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