Why Gas Prices Go Up and Down

							Title:
Why Gas Prices Go Up and Down

Word Count:
337

Summary:
There are five primary factors that
 effect the price you pay for gas a
t the pump. Learn the truth about t
he five main factors that detemine
how much your family pays for gas.


Keywords:
increase gas mileage, family financ
e, budget, save money


Article Body:
There are five primary factors that
 effect the price you pay for gas a
t the pump. Prices generally increa
se when the world crude oil market
lowers their inventories. Also, whe
n demand exceeds refinery capacity
gas prices increase.

The first factor that makes up the
price of gas at your local station
is crude oil suppliers. This makes
up about 59% of the price you pay f
or gas and it is determined by the
world's oil-exporting countries, pa
rticularly OPEC, the Organization o
f the Petroleum Exporting Countries
. The amount of crude oil that thes
e countries produce determines the
price per barrel of oil.

The next factor that effects gas pr
ices is the cost of refining the cr
ude oil. This makes up about 10% of
 the total price of gas.

The third factor is the cost of tra
nsporting the crude oil to a refine
ry, then the refined gas to a distr
ibution point and finally to your l
ocal gas station. If you are buying
 a brand name of gasoline, the cost
 that company spends in
marketing the or brand will also be
 added to the price you pay to buy
from that brand. This makes up arou
nd 11% of the total price.

The forth factor accounts for about
 20% of the total cost of gas, and
it includes federal and local taxes
. State, local and city taxes vary,
 accounting for some of the fluctua
tion you may see in gas prices in d
ifferent geographical areas.

The fifth factor is the markup at y
our local gas station. Obviously yo
ur local gas station is in business
 to make money and has employees to
 pay. So you know that they must ma
ke money on every gallon of gas the
y sell. You may be surprised howeve
r to learn that the amount is gener
ally not more than 10 cent and may
be as low as a penny per gallon! So
me states do have laws governing st
ation markup and require a minimum
percentage markup to protect small
stations from being put out of busi
ness by larger companies
who may want to undercut them.