The price of gas is constantly fluctuating and the unfortunate truth is that they tend to go up more than they go down. Trying to understand the reasons for the constant fluctuation can be very frustrating for drivers, especially when it has such an impact on their wallets.
There are many reasons why gas prices fluctuate and they are all very complex. The biggest factor affecting the price of gas is the demand for crude oil. The demand for crude oil becomes greater than the supply as the number of global drivers increases. But the number of drivers hitting the road every year isn’t the only thing affecting the supply and demand chain.
Other factors that play a role in the global oil market include geopolitical issues, natural disasters, the season, and OPEC. The supply and demand for oil is manipulated by OPEC (Organization of Petroleum Exporting Countries) in order to keep the prices of oil where they want them. This is usually done by slowing down production.
During the summer, gas prices have a tendency to increase for several reasons. In order to perform necessary maintenance, gas companies will shut down their refineries during the summer. Gasoline is also formulated differently for the summer months. Additives are added to decrease pollution and smog. Therefore, the summer-grade fuel is more expensive to produce than the winter-grade fuel. Natural disasters such as hurricanes can also adversely affect gas prices by shutting down refineries and offshore drilling rigs.
It’s hard to say what gas prices will look like in the future, especially with the advent of more fuel efficient vehicles and the increased attention being paid to alternative fuel sources—guess we’ll find out.