Who sets gas prices?


Quick Answer

Gasoline retailers set the gas price at the pump; however, many of the factors are beyond their control, such as the market price of crude oil, distribution interruptions, the work of speculators, the value of the dollar and taxes. Refining and composition requirements also contribute.

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Full Answer

The largest part of the price of a gallon of gasoline comes from the price of crude oil. Supply and global demand both act on the price, but when natural disasters or political unrest occur, prices can shoot upward, at least temporarily.

Taxes at the local, state and federal levels are the second largest component of the price of gasoline. Refiners bring in about 20 cents per gallon, although the cost of the blend used in the summer is more expensive as it burns cleaner. Finally, the retailers bring in about 14 cents per gallon, as of 2015.

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