In winter gasoline prices usually go back down. Not many people are driving like they do in the summer so the demand is less.

Supply and Demand

If the use of gas powered vehicles increases the demand for the fuel goes up. Usually when this happens it causes cost increases because of the extra production costs involved in supplying the product. The refineries have to work more to increase the supply, tankers and trucks work more to get the gas from the refineries to the gas stations.

There are no options for consumers to replace gas with, so we must pay the higher prices, because we are not able to switch to another type of fuel.

Crude Oil

Usually when the cost of crude oil goes up, so goes gasoline. Since it comes from the refining of crude oil, if the base product costs more, so will the products produced from it. Crude oil prices can depend on many things, such as production cuts, wars , problems with refineries or pipelines, political problems in oil producing countries and weather as we saw last year with the heavy hurricane season.

If OPEC (Organization of Petroleum Exporting Countries) cuts oil production it greatly influences the world gasoline prices and supplies because the countries in OPEC make up for at least forty percent of the worlds oil production. Most of the world's oil supply is found in the countries belonging to OPEC.

Only about 35 percent of the gasoline we use comes from the United States. We rely heavily on foreign oil for most of our gas supply. We are, therefore, at the mercy of many outside influences when it is determined what our gas will cost.