Why Have Gas Prices Gone Up?
Updated: Sep 19, 2022
There has been much speculation as to why gas prices have increased so dramatically in the last few months. There are many reasons, both external and internal, that have contributed to the recent hikes in price at the pump.
In this article, we will take a look at what some of these reasons are and how they could affect prices going forward.
We will also discuss some ways you can avoid paying more than you need to at the pump by taking a more efficient approach to getting where you need to go.
How much is Gas?
The price of oil is usually quoted in dollars per barrel, but is normally only charged to customers in pound/dollars per gallon.
This can sometimes lead to confusion, because a rise in oil price would actually be beneficial for a country with a declining currency and would reduce fuel costs, while a fall would make petrol more expensive.
To avoid confusion, some countries use alternative currencies when quoting and charging for fuel, or include all taxes (for example Denmark and Belgium).
However, it may not always be possible to agree on an alternative price with consumers as countries might use different types of taxes and subsidies.
What makes the price of gas go up?
Gas prices go up and down all of the time, so why did they go up in May? The latest U.S. Energy Information Administration (EIA) numbers show that gasoline prices are higher in May than they were in April.
However, not everyone is paying these higher gas prices—so what’s going on here? We’ll talk about a few reasons for rising gas prices below, but for now let’s dive into what happened with May 2022
Can drivers do anything about rising prices?
Well, there is a silver lining. While people in other parts of Europe are paying as much as $9 per gallon for gasoline, Europeans driving on diesel can still find gas below $4 per gallon.
That’s because many countries tax fuels based on their carbon content and oil is so high in carbon that diesel is about half its price.
That’s an interesting fact, but it’s also not likely to make Brits feel any better when they pull into a service station and see what they now pay to fill up their tanks.
It’s no surprise drivers are grousing about how expensive fuel has become in Great Britain right now—but unfortunately for them, there isn't really anything they can do to keep fuel costs down at the pump.
Is there any end in sight for high gas prices?
The unfortunate reality is that there is no end in sight for high fuel costs. Oil is a limited natural resource that has to be drilled out of deep holes in the ground, and global demand continues to rise—driven by developing countries like China and India.
What's more, these are not trends we can will away with technology or efficiency; they're basic realities of modern society.
What we can do as consumers is try to offset our use by finding better ways to get around town.
That could mean carpooling with coworkers, biking instead of driving or taking public transportation when possible (see Resources).
The good news is that there are lots of smart alternatives out there—if you look hard enough.
What do experts say about the price of gas?
Gas prices have been on a steady incline for months now, but why is that happening?
Gas stations are in business to make money, so it’s reasonable to assume that they aren’t just being tight-fisted about what they sell.
That leaves one of two other possible explanations: supply and demand.
Experts say that as many consumers traded in their fuel-efficient sedans for larger SUVs or trucks, there simply wasn’t enough fuel available to meet growing demand. Instead of raising their prices, stations bought less gas than usual.
Meanwhile, other factors like increasing international demand and rising production costs (and maybe even Hurricane Harvey) are also pushing costs higher across the board.
Myths, rumors and facts
As you probably know, fuel is used to power our cars. So when we talk about rising or falling fuel prices, we're basically talking about how much it costs to fill 'er up.
Believe it or not, one of the first laws regulating fuel in America was put into place over two centuries ago.
The year was 1872 and oil was considered a valuable resource (the U.S.