Gasoline Price Volatility and the 2023 RVP Season
The Low Reid Vapor Pressure (LRVP) season is upon us. Here’s what you need to know about LRVP for 2023.
RVP, or Reid Vapor Pressure, measures gasoline pressure and is mandated to specific levels by state and local governments as an ozone-control mechanism.
An understanding of RVP is helpful to clarifying a framework for the future.
In warmer months, RVP levels must be lower than when it’s cold outside. In late winter/early spring each year, U.S. spot gasoline markets start to ramp down RVP with the chain reaction then rippling to OPIS rack reports.
All U.S. cities are required to carry 9 lb. Reid Vapor Pressure (RVP) gasoline in the summer, unless a lower RVP is required under a federal RFG mandate, a state opt-in rule, or a voluntary effort by refiners to make a lower-than 9 lb. gasoline.
During the summer months, OPIS will display LRVP (Low RVP, less than 9 lb) on reports as early as April 1st, continuing through the summer until September 15th in most markets, and Eastern Texas markets through October 1st. Click here to view an infographic with details!
The LRVP mandate is not effective at the terminal level until May 1st; however, the OPIS racks may display both a 9 lb. product and a LRVP product in the same market during April and May; this is due to suppliers changing their product slate to prepare for LRVP mandates.
OPIS RFG product codes in federally mandated reformulated gas markets will remain unchanged during the summer, as the RVP for all markets is the same (7.4 lb).
Phoenix and all California Markets will be coded with CBG (Clean Burning Gasoline), and CaRFG (California RFG) codes, respectively as the RFG requirement in these markets is geographically unique.
OPIS changes the gasoline product code header in conventional U.S. gasoline markets, where there is a lower than 9.0 lb. RVP mandate.
Changes for the 2023 Season
Vancouver, Washington, gas prices will reflect 7.8-lb RVP because OPIS created a stand-alone rack market by breaking Vancouver, WA, out of Portland, Oregon, due to recent Cap and Invest regulations and product sold in Vancouver is routinely sent to the LVRP-mandated Portland, OR, market. Beginning May 1st and continuing through September 15th, OPIS will use the OPIS Summer gas CAR assessment to normalize rack prices. Vancouver, WA, prices are still displayed in the Portland, OR, terminal rack reports; however, the prices are excluded from the averages.
Here is a list of locations where you may see multiple RVPs:
- Both 7.0-lb RVP and 9.0-lb RVP: Jackson, MI; El Paso, TX
- Both 7.8-lb RVP and 9.0-lb RVP: Denver, CO; Louisville, KY; Portland, OR; Vancouver, WA; Salt Lake City, UT
And some locations where you can expect to see only LRVP:
- 7.0-lb RVP Only: Detroit, MI
- 8-lb RVP Only: Sparks/Reno, NV
Eastern Texas markets must sell fuel that is a 7.8-lb RVP from May 1st – October 1st. Eastern Texas markets are: Austin, Beaumont, Dallas, Caddo Mills, Center, Corpus Christi, Frost, Hearne, Mt. Pleasant, San Antonio, Three Rivers, Tyler, Waco, Waskom, and Victoria/Placedo.
Additional RVP levels may be displayed in OPIS reports in a market where it is not required if it is available to be sold outside a mandated area.
Download this free infographic to see when, where and how OPIS is handling RVP changes in 2023.
The market will, of course, transition up again in the fall. And you’ll be able to keep track of all the changes in your OPIS Rack Report. If you aren’t already subscribed to OPIS Racks, learn more about OPIS rack pricing or click below for a free demo.