What Affects Gas Prices?

Gas prices are constantly fluctuating and unfortunately, the tendency for prices to go up is greater than the tendency for them to go down. As drivers, it can be extremely frustrating trying to understand why the price of gas is constantly changing.

The reasons for these fluctuations are complex, but the biggest factor that affects gas prices is the global demand for crude oil. As more and more drivers hit the roads globally, the demand for oil becomes greater than the supply. But the supply and demand chain isn’t just affected by the number of people fueling up at the pump.

Natural disasters, geopolitical issues, the season, and OPEC (Organization of Petroleum Exporting Countries) all play a role in the global oil market. OPEC manipulates the supply and demand for oil by slowing down production in order to maintain the prices they want.

Gas prices also have a tendency to increase during the summer months for several reasons. For one, summer-grade gas, which is designed to reduce smog and pollution, is more expensive to produce than winter-grade gas. Also, refineries are temporarily closed down in the summer for maintenance. The gasoline supply can also be disrupted by natural disasters such as hurricanes, which can adversely affect both refineries and offshore drilling rigs.

With the advent of more fuel efficient cars and an increased focus on finding alternative energy sources, it’s hard to predict what gas prices will look like in the future—but let’s hope they’re not too outrageous.