Prices for gas change constantly, both in the short- and long-term. Gas prices never remain the same for very long. The crude oil needed to make a gallon of gasoline accounts for approximately 60% of the price you pay. Another 25% goes to refining, distributing, and marketing the gas, while the rest goes to federal and state taxes.
The pump price can be affected by any of these factors.
Changes in Crude Oil Prices
Crude oil prices are largely regulated by demand and supply. When the supply of oil declines, prices increase since everyone who wants oil is competing for a smaller amount.
Seasonal Changes
Gas prices typically peak during the spring and early summer, when more motorists are hitting the road for vacations.
Foreign Affairs
The supply or demand of oil can be affected by events around the world, such as wars. As an example, the 1991 invasion of Iraq disrupted Iraq’s oil production, reducing oil supply. Consequentially, crude oil prices doubled.
International Trade
The disruption of trade with oil-producing nations can also affect oil prices. Economic sanctions against certain countries or the trade war between two countries reduce the global oil demand.
Price Manipulation
Oil-producing countries can deliberately restrict supply of oil to drive the price up. Speculators, individuals, and companies that trade oil can bid up the oil price.
Currency Changes
Oil prices are also affected by changes in the value of the U.S. dollar. Oil is priced in dollars when it is sold on the world market. Oil becomes more expensive when the dollar is weak compared to other world currencies.
Final Word
Luckily, there are some ways to save money on gas even when the price is spiking.
For instance, you can buy Electric cars. You will need an electric car charger to power up the batteries. Electric vehicle charging stations are being built everywhere so you would not have difficulty charging car when you are on the go.
EVs are good for the environment and your wallet. An EV charger at any electric vehicle charging station will make charging your car a breeze. You can also buy an EV home charger and use it after EV home charger installation.