Monthly Archives: May 2019

What Determines Gas Prices

What Determines Gas Prices

Do you ever feel in the dark about what’s going on behind the scenes of fluctuating gas prices? We’re here to let you in on a few secrets, so you are in the know. Four core factors contribute to gas prices; the price of crude oil, taxes, marketing and distribution, and refining cost. What is your role in all of this? The Price of Crude Oil According to the EIA, about two-thirds or 70 percent of gas prices are determined by the cost of crude oil. Crude oil prices are largely determined by supply and demand, but other factors such as seasonality, inventory and the current financial market contribute. Supply focuses on the availability of crude oil, specifically the light/sweet crude which is harder to obtain and is in high demand. The price for this will naturally rise as it takes less time for refineries to process the light crude oil into gasoline. In general, if supply is limited, the price will increase.  Demand - this is where you come in! Changes in demand resul ... read more

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