Here’s part of the reason.
The 1990 Clean Air Act passed by Congress created minimum standards for gasoline nationwide that created a demand for boutique fuels. The purpose was to reduce emissions of dangerous chemicals, but lately seems to be doing more harm than good, according to Steven F. Hayward of the American Enterprise Institute.
Creating an artificial demand for ethanol additives added to the problem because states had created their own specialized standards under the act. The result is between 45 and 70 different blends of gasoline in the 50 states. The 34 states using some type of specially blended gasoline is one reason prices rise during summer when driving picks up increasing demand.
Also, the disparate fuel standards arbitrarily foisted on the market, segmented and undermined domestic competition among refiners of the fuel. That brought higher prices for specialized fuels and had the additional market distortion of discouraging foreign imports, skewing supply even more.
The bottom line is that these two effects alone tack on 10 cents to 15 cents per gallon, which adds to other costs at the pump. The government, here to help, brings with it a bill to be paid.
