What Factors Contribute to Gas Prices?

Gas prices are on the rise again. Gas prices fluctuate so much that it can be hard to keep up with the latest prices. Everything from the piping systems that carry the gas to the number of trucks available can affect the current gas prices. What else affects gas prices?

Supply and Demand

Gas prices are greatly affected by supply and demand. Let’s say we are approaching a holiday weekend and it is predicted that a lot of people will be on the road. This can affect the cost of gas. If the supply chain cannot keep up with the demand, then the price will climb because gas will become more scarce.

There may be plenty of gas in the piping system (the pipeline) but there may not be enough trucks to move the gas to the service stations. It is estimated that it would take a continuous line of 750 tankers able to move out every two minutes working 24 hours a day, every single day of the week, to move the volume out of a very modest piping system. Sometimes, the trucks are simply not available to get the gas and meet the demand and that drives up costs.

Pipeline Problems

Not too long ago the entire Eastern seaboard of the United States experienced very high spikes in prices because a piping system was hijacked by hackers. It interrupted the flow of gas, which in turn, kept gas from reaching the service stations, which drove prices up.

Other issues that can affect gas delivery and price increase can be relative to malfunctions at the pipeline source like mechanical failures. Any time a pipeline has to be repaired, you will notice a spike in costs.

Trade Problems

When there is a disruption to global trade you are likely to see an increase in gas prices. Trade plays an important role in the “crude oil” import costs. If there is an increase in these costs, that increase will be passed on to the consumer.


Tax on gasoline is high. As the taxes increase, so will the cost of fuel. For example, the flat federal rate on a gallon of gas is a whopping 18.4 cents, and on top of that, you are paying a state gas tax as well. In New York State, the gas tax per gallon is 48.2 cents per gallon. If you live in NYS you are paying roughly 70 cents per gallon in taxes per gallon you pump.

When it comes to gas price, there are a lot of reasons you can expect to pay more at the pump. It’s important to do some research to understand why gas may be rising at a certain time and falling at a different time.

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