Why do Gasoline Prices Change

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Recommended: Oil prices and supply and demand

How many times does the price of gasoline change every week? Sometimes it seems as if the price changes every day. Statistics say that 70% of the oil that comes to the United States is used for transportation (Energy Independence, 2013). The automobile has become a necessity to most American homes. The semi is the primary means for bringing products to our stores. The airplane has become the preferred mode of long distance travel. Since each of these use some type of oil based fuel, it is important to understand what affects the price, since these industries affect the cost of almost everything we do.
The primary factor for the cost of fuel is the price of oil. In 2012 66% of the price of gasoline came from the cost of oil (eia, 2013). Organization of the Petroleum Exporting Countries (OPEC) is a collection of oil producing countries which currently produces 43% of the world’s oil (eia, 2013). OPEC will adjust the cost of oil based on supply and demand. Prices caused by supply would be based upon events within oil producing countries, such as war in the Middle East or political unrest in Venezuela. When OPEC fears that local troubles could affect supply, the price will go up to offset losses. Demand also affects the price and it changes constantly. Currently the United States uses about 20% of the world’s oil (CNBC, 2009). But most Americans don’t think about the demand from of the rest of the world. The two most populated countries in the world are China and India (World Atlas, 2012). The middle class is growing in these countries which are producing more drivers outside of the United States. OPEC will adjust prices to everyone to make up for the increased demand worldwide.
As of 2012, the next factor that affect...

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...o the store and start to embrace cars that run on alternative energy. There are things we must do if we want to do our part to lower gasoline prices.

Works Cited

World Atlas (2012). ‘Countries of the World‘. Retrieved from http://www.worldatlas.com/aatlas/populations/ctypopls.htm#.UpdpOSdlDGg
CNBC (July, 2009), ‘What Affects Gas Prices‘ Retrieved from http://oilprice.com/Energy/Gas-Prices/What-Affects-Gas-Prices.html
Energy Independence (2013). ‘American Fuels‘. Retrieved from http://www.americanenergyindependence.com/fuels.aspx
U.S. Energy Information Administration (EIA) (Feb, 2013), ‘Factors Affecting Gasoline Prices’ Retrieved from http://www.eia.gov/energyexplained/index.cfm?page=gasoline_factors_affecting_prices
C. Freudenrich (2013), ‘How oil refining works’, Retrieved from http://science.howstuffworks.com/environmental/energy/oil-refining.htm

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