Gas Prices Are Rising for Many Reasons
January 4, 2022
The argument about why the price of gas has increased has been a debate for months now, but do we really know why?
Most people blame President Joe Biden, but his role doesn’t make much of a difference in how much gas costs.
Presidents do not have much control over gas prices; in fact, as the U.S. Energy Information Administration notes, the price of gas is determined by four huge factors, including: taxes, refining, the cost of marketing and distribution, and the cost of crude oil.
The price of gas is not really political; instead, it has to do a lot with supply and demand. Supply and demand is an economic concept that states when there’s little demand for a product, but plenty of that product, the price for it will be low.
On the other hand, a product (think gasoline) is in high demand, but there’s not as much of it as usual, the price will be higher.
Of course, Covid-19 affected the supply and demand for gasoline. The rising cost of gas has to do with pandemic restrictions and the lifting of lockdowns, which states (not the federal government) predominantly had control over.
According to Businessinsider, because Americans have been driving more since the lockdowns have lifted, a supply of gas to gas stations and trouble in the trading and supplying of energy overseas is causing crude oil to be more expensive.
Crude oil is used to make gasoline; it’s a black liquid called petroleum.
In January 2020, oil demand from China continued to fall because of economy-wide pandemic-related closures.
The demand for oil decreased by three million barrels per day, which represents about 20 percent of the country’s overall oil consumption. The normal consumption of oil in the U.S. is 20 million barrels of oil a day.
Although the decreased need for oil may sound beneficial, most people need it, which is in gas they put in their cars, to go to work, school, or even to the store to get food. This means oil prices have to go up a lot to get consumers to change their behavior.
Seasonal change also plays a huge factor in the change in gas prices.
First, crude oil prices tend to drop in the months of March and April, because this is when refineries go through regular maintenance. This means, if they are closed or not working at top capacity, they are producing less oil.
This is also the time that manufacturers are switching from winter blends to summer blends of gasoline.
There are about 20 different blends of gasoline to meet different state guidelines, according to Popular Mechanics. The difference in many blends is the reid vapor pressure (RVP). “The higher the RVP number, the easier it is to vaporize, and the worse it is for the environment,” Popular Mechanics explains.
Summer-blend gas has a lower RVP to prevent excessive evaporation when outside temperatures rise, thus releasing more pollutants into the environment. Summer blends tend to be more expensive due to the production process taking longer. This can add as much as 15 cents per gallon to the cost to produce these higher-grade fuels.
The price of gas has risen dramatically, going from an average of $2.42 per gallon in January to $3.076 in May and now reaching a high of $3.60. Visit the following link to see a breakdown of prices in Pennsylvania here.
Because of driving more in summer, summer blends being more expensive, and crude oil prices going up because of Covid, it all adds up.
The prices of gas will always be increasing as time goes on; the price of everything will, but because of other problems as well, gas prices are higher than normal.