Understanding How Gas Prices are Influenced by Movements on the Commodity Markets

Posted on Posted in Financial

Most adult Americans today rely heavily on personal vehicles for regular transportation, and that status quo seems unlikely to be upset any time soon. While residents of a handful of American cities might enjoy access to public transportation of a quality that makes going without a car or truck practical, they represent only a tiny fraction of the nation’s population. Even if some residents have become happy to rely upon ride sharing services like Uber and Lyft, many more feel that the expenses associated with regular usage might better be spent on actually owning and operating a vehicle. As a result, vehicle ownership remains a basic part of life in the United States for a great many people, and this means that paying for all the associated costs does, as well.

While keeping a car in excellent working order can consume a fair amount of money, it is costs of more regular kinds that tend to add up the most. Every responsible driver, for instance, will carry automotive insurance, and this costs many vehicle owners a thousand dollars or more each year. For those who drive any significant distance, though, the cost whose impact is probably felt most often and pointedly is that required to put fuel in the tank of a car or truck. Even with gasoline prices standing fairly low at the moment, by the standards of recent history, few drivers will be able to overlook the regular outlays that come from filling up.

That leaves many drivers wondering about just what goes into determining the price of gas and diesel fuels. As a great read online makes clear, the commodity cost of crude petroleum is the single largest factor, but far from the only one. In determining the price to be paid at the pump at any given time, other issues like the current backlog of refined fuel and tensions between the prices for different grades of crude must also be taken into account.

These additional complications can make it more difficult to understand why gas might be holding at a particular price at a given moment. Drivers can rest assured, though, that sanity will always prevail in the end, even if gasoline pricing can take some time to fall in line with developments on the commodity petroleum markets.