A number of factors affect gas prices, including the cost and supply of crude oil, the cost of refining, taxation and marketing. The most influential factor, the cost of crude oil, may be influenced by the Organization of the Petroleum Exporting Countries, or OPEC, which can set production limits on its members, thereby restricting supply.Continue Reading
Supply can also be disrupted by geopolitical events, such as wars, and natural disasters.
Another factor that often contributes to higher gas prices is the distance of gas retailers and consumers from oil refineries or pipelines, as well as shipping ports that receive crude oil imports for refining.
Factors of marketing include the operational costs of gas stations, which will inevitably have an impact upon product prices.
Taxation of gas is threefold, with taxes being levied at the federal, state and local levels. According to the Energy Information Administration, federal excise taxes on gas were 18.4 cents per gallon, as of early 2015, while state excise taxes were, on average, 24.17 cents per gallon. With further local taxes levied by county and city authorities, this can have a significant impact on gas prices.
Another influential factor is stock market speculation, which has been known to alter oil prices from as much as $147 per barrel to just $30 in slightly more than half a year.Learn more about Economics