No one entity determines the price of gas, and it is instead largely determined by the price of crude oil, according to Business Insider. Other factors that influence the price of gas include federal and state taxes, refining costs, supply and demand, politics, and distribution and marketing costs.Continue Reading
Whether from OPEC or non-OPEC nations, the suppliers of crude oil are a major factor in the price of crude oil, according to the U.S. Energy Information Administration. OPEC provides 40 percent of international crude oil, and the organization tightly controls the production of oil in these countries. Due to their large market share, OPEC's decisions affect the price of crude oil. For example, when OPEC reduces the production of crude oil, gas prices typically increase globally.
Non-OPEC countries do not belong to an organization, and the price of oil accordingly depends on the country of origin or on the national, international or investor-owned oil company that controls the oil production, as the U.S. Energy information Administration explains. Whereas OPEC tends to influence prices, crude oil produced from non-OPEC sources fluctuates with the market, which is influenced by factors such as supply and demand.
Federal and state taxes are the second biggest factor that affects the price of gas after the cost of crude oil, and it is followed by profits and the cost of refining crude oil, according to Investopedia. The price of gasoline is also heavily influenced by supply, how much each country or organization is producing, and demand, which increases and shifts to different parts of the world as the number of people world wide who depend on gas increases.Learn more about Investing