Factors Affecting Car Gasoline Prices
May 27, 2022Admin
News Standard
Car gasoline is one of the most important expenses that an American family has to deal with every month. Whether you have been driving for a long time or have just gotten your driver’s license, you are probably still wondering how gas prices are determined and what factors go into the price you pay.
Factors affecting Car gasoline prices
1. Demand
This is the most basic factor and factor that is the most influential of all. If the demand for gasoline is too high, it means that there are more and more Americans driving their cars around. This translates to a greater need for gas but only if supply remains unchanged. If a lot of people are going out of town on a Friday night, you can be sure that they will spend more on gas as well as oil than the rest of the week. Anytime there’s an increase in demand, there will be an increase in price.
2. Supply
Supply refers to how much oil companies have available at any given time. If there are a heavy number of Americans driving on the roads, then there will be less oil for sale with each passing year. The demand for gasoline continues to grow because of this oversupply in supply.
3. Refining
Refining is what happens when oil companies take crude from where it is produced and make it into gasoline, which they can then sell to consumers. This process can affect prices because the more refined a product is, the cheaper it will be in bulk but also the more expensive it will be per unit.
4. Taxes
Since the U.S. government realizes that a potential source of income is being used up (gasoline) and so they add taxes onto the price of each gallon. The good thing about these taxes is that, unlike normal taxes that you pay, it goes back into the infrastructure of our roads and highways, which keeps them from deteriorating.