Factors That Impact Gas Prices

Gas prices are one of the most volatile things we deal with in our daily lives, but why is that? There are all kinds of tricks to get the best price on gas, but why does the price keep changing? Below are some of the biggest factors that change the price of gas in the United States.

Where You Are

Where you decide to fuel up is one of the biggest factors on the price you will pay. There is a federal tax on all gas sales of $.184 per gallon, but states taxes on gas vary greatly. If you live in the local area you likely experience this, even if you don’t realize it. New Jersey gas is much cheaper than Pennsylvania and most other surrounding states’ gas because New Jersey has a much smaller state tax on gas sales, even though it was just raised slightly. Another major factor on gas prices is what the local economy is like where you buy it. If you buy gas in a big city it is likely to be more expensive than buying in the suburbs, similar to most items. There is also the aspect of local competition. If your gas station is the only one in town or only one nearby, you are going to pay a little extra. The first factor in how much you pay for your gas is where you to decide to fuel up.


Gas prices can fluctuate a ton based on what is happening in the political world. The vast majority of gas produced for commercial use comes from countries in the very volatile middle east where things can change every day. There are different sanctions imposed on countries, supplies disrupted, and things like this that affect the price of your gas everyday. The threat of things happening is often enough to raise the price in the United States. OPEC is another major reason for these fluctuations as they are the organization responsible for so much of the world’s oil production. Any political changes to the 12 OPEC countries or to OPEC itself will have immediate impact on gas prices. Politics will change everything in the world, but changes will be immediately seen in the fuel markets.


Another major factor that changes the price of your gas is the weather. Extreme weather often means higher fuel prices for a number of reasons, but basically because they can. The extreme weather means that anyone who is buying gas probably needs to right then and there and will not be sensitive to price. Beyond that, weather actually has a huge affect on the demand of gas. For example, warm or cold weather means that people will be running their A/C or heaters, which means more fuel use. More fuel use means less fuels available which means higher prices, so even the slightest change in climate can affect gas prices.

What’s Happening

What is going on in the world like events, holidays, vacation time, and a number of other things are one of the biggest factors that change what you pay at the pump. If it is a holiday weekend, especially in the summer when more people are traveling, it is not uncommon for fuel prices to be higher. Holidays are a time when there is a surge of people traveling so gas stations try to take advantage of this by raising their prices. The summer months in vacation destinations often have higher gas prices as well. For example, there is a good chance you will pay more along your route to the Jersey Shore this summer than just doing some local driving. Pretty much any event that could cause an uptick in travelers on the road is often an opportunity for gas stations to charge you more.

These factors above are only the beginning to what goes into the final price of gas. As with most other things in the world, fuel price depends on supply and demand. The more people that want gas, the more you will pay. We suggest planning your fuel ups carefully to be sure you are getting the best price possible!

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