The Reasons Behind Fluctuations in Gas Prices

There are several factors that affect Gas Prices around the world. They include international crude oil prices, the cost of processing the crude oil, the costs of distributing the oil, the current exchange rates for foreign currencies, taxes imposed on the oil by state and federal governments, demand and supply in the market as well as factors such as local or regional availability of crude oil sources. All these factors play a huge role in the pricing and cost of Gas Prices across the country and globally.

Sometimes other factors may come into play and affect the prices of gas, making the price go either much higher or much lower. Good examples of these include Geo-politics and global politics, threats of war, political upheaval and unrest in source countries as well as economic activity. All these factors do have an impact on the prices of global crude oil prices and this may in turn affect local gas prices across various states and cities.

There are some nations across the world that heavily tax gas while others heavily subsidize it. In the USA, gas is heavily taxed. This is the same in Europe and countries such as Japan. On the contrary, the price of gas is heavily subsidized in countries such as Iran, Saudi Arabia and Venezuela. This is in an effort to make the prices much lower than would be the case. Lower Gas Prices help prop up the economy as the price of gas determines a lot of other factors. For example, lower cost of gas will usually result in cheaper commodities, lower cost of production, cheaper goods and cheaper transportation. Such factors in return will lead to increased economic activity, lower expenses for manufacturers, cheaper goods for consumers and hence increased spending.

On the other hand, higher gas prices will result in higher costs of production, more expensive goods, increased costs of transport as well as a general rise in the cost of living. This is why governments are always determined to ensure stability in the markets so as to ensure the prices are steady rather than a shaky market situation with Gas Prices either fluctuating or constantly rising.

In the USA, consumption of gasoline stands at about 20 million barrels per day. This is gas consumed in factories, processing plants, power plants, for heating and cooling purposes, in locomotives, cars and trucks as well as all other types of use. Many economists believe gasoline is the bloodline that keeps the wheels of the US economy grinding. The highest demand for gasoline in the USA is in the months of summer. The reason is that most Americans prefer to head some other place for a break or holiday and a majority choose to travel by car. Organizations and groups that choose to track Gas Prices in the USA check prices on a weekly basis, monthly and over the years. Prices fluctuate every now and then but the prices overall do keep getting higher. All these factors are important in keeping Gas Prices in check and ensuring affordable gas is available to all sectors of the US economy.

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