Why Gas Prices Fluctuate
July 24, 2019
It happens all the time. You stop at a gas station because you think you’re getting the best deal. That’s when you drive down the street and see a gas station with even cheaper gas. Have you ever wondered, “How is that possible?” There are actually many factors that go into why gas prices fluctuate. Keep reading to find out more.
One of the most influential factors of fluctuating gas prices that you may experience is the time of year. Prices in the Midwest are especially considered seasonal as we get the full effects of winter, spring, summer, and fall. Also, take into consideration when large groups of people plan to travel. Here is a breakdown of gas fluctuation when the seasons change:
The lowest gas prices can be found during winter. During this time, there is a lower demand for gasoline as fewer people are on the potentially icy roads. With that, refineries use this time of the year to undergo maintenance around February.
You will see prices start to rise in March as the weather warms up and refineries start changing their product to more expensive summer blends. It’s important for these refineries to start this process in the spring in order to not only get rid of all winter-blend fuels by May, but also to create enough fuel for the summer.
Summer is the most expensive time for gas as the demand is high. There are also more fuels required to be produced for the summer. That means suppliers of gasoline have to purchase more fuel for specific customers and sell at a higher price to earn a profit.
By September, the demand for gasoline slowly begins to fall. This causes prices to decrease and everyone begins preparing for the less expensive winter-blend fuels once again.
When it comes to supplying consumers with gasoline, all station owners get to make their own decisions. One of these decisions is who provides them with the gasoline in the first place. For example, when we work with a gas station to provide them with fuel, they sign a contract on how often, how much, and when they need it. Our prices for them will essentially help them determine their prices by the gallon. Learn how we deliver fuel in our previous blog.
Gas stations and fuel delivery companies like us also have to market themselves and the products they provide. Many gas stations sell gasoline, merchandise, and food/drink to help their business earn a profit. If a gas station is able to make more money on the other products, there’s a chance that their gasoline is cheaper than the other guys. Fuel delivery companies, on the other hand, have to figure out how to let the gas stations know what they are capable of offering.
According to the Wall Street Journal, when you are filling up at the pump, 56% of your dollar is going toward the price of crude oil, 17% to taxes, 13% to refining costs, and 13% to distribution and marketing. When oil prices fluctuate, gas prices do the same. Refineries can even shut down, causing shortages.
HSO services all of Eastern and Southern Missouri through our locations in Barnhart and Poplar Bluff. Farms, construction sites, and convenience stores are just a sample of who we service. We even supply racing gas, methanol, aviation gasoline, and jet fuel for some. In the end, our ultimate goal is to partner with our customers by listening to their needs and offering solutions that we are uniquely positioned to provide.
Contact us today at 1-800-467-5044 to find out more or to request our services.