Gasoline prices are a hot-button political issue, with the oil industry and politicians trading blame for soaring costs. But there's no one person or group responsible for gasoline prices — instead, the price you pay at the pump is determined by a variety of factors.
How Gasoline Prices Are Determined
The price you pay at the gas station depends on a number of factors, including the cost of crude oil, the costs of refining that crude into gasoline, and federal, state, and local taxes. In addition, geopolitical events that affect the oil market also impact prices.
OPEC's Oil Cuts, 1973-1974
The first major shock to the gasoline market occurred in 1973 when OPEC, then the Organization of Petroleum Exporting Countries, cut off supplies of oil to the United States. The result was a spike in prices that quickly rose to record levels.
Russia's Invasion of Ukraine, 2015-16
The Russian invasion of Ukraine triggered a global supply disruption and led to an increase in oil prices worldwide. As a result, the average price for a gallon of regular unleaded gasoline in the United States has surged to more than $4 per gallon – an all-time high and well over double its 2008 record.Despite these higher gas prices, Americans are still paying less for gas than many other car-based economies around the world. In fact, the United States hovers in the middle of a list comparing gas prices across 150 nations, according to Global Petrol Prices.
What You Can Do About Gas Prices
Thankfully, there are a number of things you can do to lower your gas bill. From looking for the cheapest stations to taking advantage of loyalty programs, you can save money on your next fill-up.
Do-All Map Apps
Whether you're searching for the cheapest gas near your home or trying to avoid the worst of the rush, Google's do-all map apps can help you find the lowest prices. These tools work by displaying current gas prices at the gas stations in your area, and they let you compare them to the price at other locations.If you're traveling, the app can even tell you the cost of a hotel room nearby, making it easier to choose a location that won't add extra to your travel expenses.Do-All Maps can also help you find the cheapest gas in your area, with maps that show stations with the highest prices and those with the cheapest. You can tap the gas station you're interested in to see more details, such as current fuel prices and other offers.
Gasoline Prices Are Variable
Different regions have different costs for delivering gasoline to retailers, depending on a number of factors, including distance from refineries and distribution facilities, as well as retail competition and operating costs. Additionally, gasoline prices tend to be higher in areas with more frequent supply disruptions because transportation costs for getting gasoline to the consumer often increase when supply is disrupted.
