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To protect themselves against this possibility, energy traders buy wholesale gasoline futures on financial exchanges. That pushes wholesale gasoline prices up. And higher wholesale prices are quickly translated to higher retail prices. Distributors and gas station owners buy gasoline every day based on a price set on exchanges. Station owners then change their prices based on how much their last shipment cost, how much the next shipment is likely to cost and what their closest competitors are charging. Retailers can go back to selling winter blends on September 15. While it's not required, most do so because it is less expensive. Gasoline prices generally decline in the autumn, along with gasoline demand. Seasonal price swings are not unique to the energy business. Flights to Europe are more expensive in summer, when travel demand rises, and strawberries and tomatoes get more costly in winter because they must be shipped from far-flung places. Yet when it comes to gasoline and spring price hikes, drivers don't want to hear about supply and demand or higher production costs. Tony Kost of Leesburg, Fla., who commutes 80 miles roundtrip a day for work, says it's hard to buy the industry's explanation for the seasonal price spikes. He has a simpler, if unproven, theory: "Oil industry price fixing." "The oil industry has inflated the price of gasoline," says Kost, who paid $3.91 a gallon the last time he tanked up. There are some consolations for Kost and other drivers. Even though it may not feel like it, gasoline prices do usually dip after their spring peak. Last year gasoline fell from $3.98 per gallon on May 5 to $3.55 on July 1 and finished the year at $3.28. Also, summer gasoline blends improve fuel economy by 1 percent to 2 percent. That means drivers will at least get to go a little bit farther on that pricey tank of gas.
[Associated
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