Q:

Why does the price of gasoline fluctuate?

A:

Quick Answer

The main cause of fluctuations in gas prices is the fluctuating cost of crude oil. Other factors that impact gas prices are season of the year and weather-related disasters.

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Full Answer

Gasoline is produced through the refinement of crude oil. The price for oil is in part determined by global supply and demand, as it is sold on the global market. A rise or fall in global demand relative to global supply can cause gasoline prices to fluctuate.

Environmental Protection Agency rules state that gasoline blends that produce less smog must be sold from June to mid-September. Summer fuel blends are more expensive than winter blends. Weather-related disasters affect the price of gasoline because U.S. refineries are based primarily on the Gulf Coast. A weather disaster in that area can shut down refineries and affect the available supply of gasoline, thus raising prices.

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