Most people realize when gas prices rise even by a few cents. Do you ever wonder what influences these gas prices and why they spike or drop? It’s not a simple answer since many factors determine the price of gas. There are three primary reasons gas prices have recently begun to increase.

Venezuelan Politics

The United States used to be one of Venezuela’s largest exporters, but the volume has dropped recently due to its failing economy. The fate of the Maduro regime’s impending collapse has increased tensions and created conflict. The U.S. refiners will need to examine alternate options to make up for the lack of crude oil coming from Venezuela. Finding new sources costs more money which is passed on to the consumer at the pump. It’s impossible to determine just how much of an impact this has had on prices since there are other factors directly influencing prices for consumers. 

Refinery Maintenance

Refineries shut down operations for maintenance during this time of year. The maintenance takes a few weeks due to the large number of complex and moving parts the refinery utilizes. These parts operate in all sorts of weather and conditions so they need to be examined regularly for quality assurance. This time of year is when the EPA requires companies to switch from their “winter blends” to the “summer blends” so it’s the optimal time for maintenance. The change increases transportation costs because many refineries shut down so others have to make up for the shortage, causing prices to rise. 

Price Increase

Sometimes the most obvious answer is the right one. The refining process breaks crude oil down into diesel and gasoline for fuel. Price increases at the pump are directly related to the increases in the price of a barrel of crude oil. If the price drops 6% for a barrel, it might also cut how much you pay when filling your tank. 

Refineries work to meet the demand consumers have for diesel and gasoline. When the price of crude oil increases, the price increases for you to fuel up. Every increase, no matter where it occurs, impacts costs in some way and it’s typically passed on to the consumer.