16 Fascinating Things You Should Know About Gas Prices

16 Fascinating Things You Should Know About Gas Prices

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If you’re like most people, you probably think about gas prices more now than you ever used to. You might be wondering why they’re going up and down so much, or what’s causing them to change. In this blog post, we’ll give you 16 facts about gas prices that will help you understand them better. We’ll also explain what causes changes in gas prices, and offer some tips for saving money at the pump.

16 Fascinating Things You Should Know About Gas Prices

16 Things You Should Know About Gas Prices

Gas prices are at an all-time high, and there’s no end in sight. Here are 16 things you should know about gas price inflation:

1. Gasoline is Sold and Priced By Grade

The price of gasoline is determined by its grade, which is set by the American Society for Testing and Materials (ASTM). There are three main grades of gasoline sold in the United States, although you can find 85 octane in some locations:

  • Regular Unleaded– 87 octane
  • Mid-grade Unleaded– 89 octane
  • Premium Unleaded– 91 or higher octane

2. Gas is Sold Based on Octane Levels

Octane is a measure of a gasoline’s ability to resist “knocking” or “pinging” during combustion, caused by the air/fuel mixture detonating prematurely in the engine.

The higher the octane rating, the more resistant the fuel is to knocking.

Detonation can cause engine damage, so most automakers recommend using gasoline with an octane rating that matches or exceeds the level recommended for their vehicles by the manufacturer.

3. The Difference Between Gas is the Octane Rating

The main difference between regular unleaded gasoline and premium unleaded gasoline is the octane rating.

  • Premium gasoline has a higher octane rating than regular gasoline, which means it’s less likely to cause knocking or pinging during combustion.
  • Regular Unleaded gasoline has an octane rating of 87 in most locations, while premium Unleaded gasoline has an octane rating of 91 or higher.

4. The Retail Price of Gasoline Includes Four Main Components

The retail price of gasoline includes four main components of cost or expense:

  • Crude oil- The cost of crude oil is the largest single component of the retail price of gasoline.
  • Refining– Refining costs account for about 10 to 15 percent of the retail price of gasoline.
  • Distribution and marketing– Distribution and marketing costs account for about 10 to 20 percent of the retail price of gasoline.
  • Federal and state taxes– Federal and state taxes account for about 18 to 20 percent of the retail price of gasoline.
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5. Crude Oil Prices are the Biggest Factor in Gas Prices

The price of crude oil is the largest single component in the retail price of gasoline, accounting for about 60 to 70 percent of the price. The price of crude oil is determined by global supply and demand. Changes in the price of crude oil can have a big impact on gas prices. For example, when crude oil prices increase, gas prices usually increase as well.

6. Refining Costs are the Second Largest Factor in Gas Prices

Refining costs account for about 10 to 15 percent of the retail price of gasoline. Refining is the process of converting crude oil into gasoline and other petroleum products. The cost of refining varies depending on the type of crude oil being used, the efficiency of the refinery, the octane to be achieved, and other factors.

7. Distribution and Marketing Costs are the Third Largest Factor in Gas Prices

Distribution and marketing costs account for about 10 to 20 percent of the retail price of gasoline. Distribution costs include the cost of shipping gasoline from refineries to gas stations. Marketing costs include the cost of advertising and promoting gasoline to consumers.

8. Federal and State Taxes are the Fourth-Largest Factor in Gas Prices

Federal and state taxes account for about 18 to 20 percent of the retail price of gasoline. The federal gasoline tax is 18.4 cents per gallon, and the average state tax is 20.5 cents per gallon.This tax is usually designated to be used for the building and maintenance of our freeways and roads

9. The United States Banned Russian Oil Imports

The United States banned oil imports from Russia in response to Russian aggression in Ukraine. This means the global supply is also being squeezed.

10. The United States is the World’s Largest Oil Producer

The United States is the world’s largest oil producer, and it produces more oil than it needs. However, we actually export more oil than we use.

11. The United States is the World’s Largest Oil Consumer

The United States is the world’s largest oil consumer. We consume more oil than any other country, and our consumption has been increasing in recent years.

12. Gas Prices Have Been High in the Past

While gas prices are high right now, they have been almost as high in the past. In 2008, gas prices reached a record high at the time of $4.11 per gallon. Yes, they seem to be soaring higher, currently, and we saw an increase this week right before the Memorial Day Holiday weekend.

Prices tend to increase at this time each year in anticipation of higher demand with the summer vacation and air travel months ahead. Hopefully, we’ll see some factors eventually come into play that will lower the cost at the pump.

13. Gas Prices Fluctuate

Depending on what’s going on in the world the price of gasoline fluctuates. For example, gas prices tend to increase when there is turmoil in the Middle East because that’s where a lot of oil is produced. The challenges in Ukraine have certainly prompted some of the price increases we are seeing. Also, the supply chain fluctuations from the lockdowns and labor issues are still influencing how oil gets from the well to your tank and the costs to do so.

14. Legislation and policy Can Affect Gas Prices

Federal and state policies can affect gas prices. For instance, the United States’ ban on oil imports from Russia has contributed to higher gas prices. There are also different attitudes and pressures to open or close well locations, what can be drilled in offshore oil lease locations, and do we want to build more pipelines for transportation of the oil.

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15. Cyclical Patterns Affect Gas Prices

There are cyclical patterns in gas prices. Prices tend to go up in the summer because more people are driving and there is increased demand for gasoline. Prices may also tend to go up in those very cold winter months because of increased demand for heating oil.

16. Natural Disasters Can Affect Gas Prices

Natural disasters can also affect gas prices. For example, Hurricane Katrina caused gas prices to spike in 2005 because it disrupted the production and distribution of gasoline.

Tips for Saving Money at the Gas Pump

Here are some tips for saving money at the gas pump:

1. Use Ethanol Free Gasoline

Ethanol-free gasoline is made without the addition of ethanol, which can damage small engines. Ethanol-free gasoline typically costs a few cents more per gallon than regular gasoline, but it can save you money in the long run by preventing engine damage.

Additionally, ethanol burns quicker which means you have to put more in your gas tank than if you buy it without ethanol. 

2. Check Your Tire Pressure Regularly

Under-inflated tires can reduce fuel economy by up to 3 percent. Make sure to check your tire pressure regularly and inflate them to the proper level.

3. Use the AC Sparingly

The air conditioner puts an extra load on the engine, which reduces fuel economy.

4. Shop Around For the Best Price

Gas prices can vary from one gas station to the next, so it pays to shop around for the best price. You can also visit websites like GasBuddy that track and report where gas is the cheapest.

5. Use a Gas Rewards Credit Card

There are a number of gas rewards credit cards that give you lower prices at the pump, cash back, or points for every gallon of gas you purchase.

6. Fill Up Your Tank in the Morning

If you’ve ever filled up your gas tank first thing in the morning, you may have noticed that the gas seemed a bit denser than usual. In fact, gas is denser in the morning due to the cooler temperatures overnight. This means that you actually get more gas for your money when you fill up in the morning! However, as the day goes on and the temperature rises, the gas expands and becomes less dense. So if you’re looking to save money on gas, it’s best to fill up early in the day.

7. Don’t Let Your Tank Get Below Half Full

Keeping your tank above half full helps prevent condensation from forming in the tank and water from getting into the fuel line. This means that you will use less gas if you keep your gas tank full. Read Why You Should Keep Your Gas Tank Full for more information.

8. Use Rewards Cards

Many gas stations offer rewards programs that give you discounts on gas or other perks for loyalty. If you frequently fill up at the same gas station, it may be worth signing up for their rewards program.

9. Stock Up on Gas

If you see gas prices start to drop, it may be worth stocking up on gas so that you have a reserve in case prices go back up.

How to Store Gas

If you plan on stocking up on gasoline in the future, it’s crucial that you store it correctly. Not only can gas be a safety hazard, but without proper storage, it can be unusable. Here are a few tips to help you make sure your gas stays fresh:

  • Store gas in a cool, dry place. Heat and moisture can cause gas to degrade, so it’s important to keep it away from those elements.
  • Use the right gas storage container. If you are storing gas long-term, I recommend using a 5-Gallon Galvanized Steel Flammable Safety Can or for more gas storage, a 30-Gallon Gas Caddy
  • Make sure your storage container is clean and well-sealed. Any dirt or debris in the container can contaminate the gas, so it’s important to start with a clean slate.
  • Add a fuel stabilizer to your gas before storing it. This will help prevent degradation and keep your gas fresh for up to two years. 
  • Be cautious when filling your tank right after the gas station storage tanks have been filled. Over time, the large tanks can get debris that builds up, and when the tanks are filled the debris is stirred up and is pumped into your tank if not given time to settle. If you see a tanker truck at your favorite gas station, I’d suggest filling elsewhere or coming back later.

Final Word

Gas prices are a major factor in the cost of living, and they can have a big impact on your budget. By understanding how gas prices are determined and using the tips above, you can save money at the pump. May God Bless this world, Linda

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  1. Politics and lies is the cause of the biggest increase right now. It’s the major contributing factor in destabilizing the futures market.
    Fuel doesn’t double because the 11% from one place stopped rolling in 3 months AFTER the rise in price.

    I’d be thinking along the lines of mandatory rationing very soon. It’ll eliminate small farmers because they won’t qualify for exemptions like the big ones will. You can figure out the why

    1. Hi Matt, I had to be really careful how I wrote this one, that’s for sure. I couldn’t write everything I wanted to. We had this gas shortage stuff in the 1970s, and we all know why. This is the worst situation with gas shortages/prices in my lifetime. I didn’t think we would see it again but worse. Linda

      1. Lol I’m Linda’s inner internet voice that’s not supposed to come out. That’s kinda how I am at thanksgiving and gatherings too lol

          1. Lol they are glad I’m not there long for thanksgiving. I drive home the night before and spend the morning putting up any deer we’ve killed then attend dinner and drive back out. It’s 2hrs each way.
            But now birthdays n such you’ll get the full show lol
            I take great pride in being “that uncle”. Sure don’t stop them from calling me anytime they need help though

      2. I thank you Linda for sharing everything you have researched. I am so frugal, my husband will tell you, the screaming you hear is my pennies begging for mercy. BUT as much as possible, I WILL NOT let the ridiculous price of gas keep us from our rides in the country……IN fact, just the opposite….we will put our money in the gas tank, and use those miles to ride out to small local farm stands, to buy what produce we can, and show our support for struggling farmers. I will not give into the fear that is ravaging our country.

        1. Hi Chris, I’m so glad you mentioned the rides in the country. I told my husband we must get out and take a drive to see the city or the country. Thankfully, our car is small and uses less gas but even so, we must get out. We will help the economy in different ways. We cannot give into the fear that is ravaging our country right now. Great comment! Linda

  2. Gasoline prices are outrageous because the Biden administration policies are there to force the price up will people abandon historical carbon-based fuels. The Marxists are trying to force their green energy on the country. So-called green energy cannot supply the energy demands of the economy without destroying the economy and destroying our country with it. There is not enough space here to detail it all. Rest assured that this is part of the Marxists’ plan.

    1. Hi Harry, you know I don’t talk about politics or religion on my website. But you know me well enough that you know I love your comment. I have to tell you something funny, not funny, but funny. When I went to take a picture of a gas pump here close to my home, I got out of the car to be able to photograph it with my cell phone. Then I see this employee walking toward me, I did not buy gas, I just wanted pictures. I explained I was writing an article on gas prices, and well, that opened up a 15-minute conversation. He basically could have written exactly what you said and much more. Love you my friend, Linda

      1. Linda,
        I knew I was treading on thin ice posting that in your blog. I hope that I do not cause you any problems, but seeing what the country is going through is like a dagger through my heart.

  3. Hi Linda:

    Everybody needs to know all about this. I am lucky my husband used to work in the trucking business and he knows all this but I think I and my children need to learn all that I can because neither of us is getting any younger and the will need to know this information also

    1. Hi Jackie, it’s crazy how high the prices are. We need the truckers/truck drivers to be able to buy gas to keep the trucks running for all of us. Linda

      1. How about the fact Biden artificially caused the rise by killing the pipeline on day one. We were energy independent under Trump. Liberals are against oil and coal because they want to force an ideology on this country without consideration the damage they are doing. The federal government would no longer be in charge of permits and leasing. Businesses would be allowed unfeathered access to land that they believe can make money. Capitalism would be the best way to cut costs. Environmentalist if they have a problem with it would be shipped off the Venezuela.

        1. Hi Kent, I don’t like to talk politics or about religion on my website, but you are right. We were all shocked when the pipeline was shut down. I wish we could get the truth out. The REAL truth. Thank you, Linda

    2. Amen!!! You stop drilling, the supply shrinks. The supply shrink combined with increased demand equals skyrocketing prices!!

  4. I’m concerned about gas prices too because we are wheat farmers and the price of fuel along with fertilizer costs may force us to sell our land. We don’t know how much longer we can go on this way because we are not connected to the corporate farm world. It’s very upsetting to husband because his family has owned this land for over a century. It seems like Washington D.C. doesn’t care about us at all. So frustrating…

    1. Hi Paula, oh this makes me so sad and mad at the same time. The price of fuel and fertilizer is out of control. I pray you can hold on to the family farm. This is so wrong. Hugs from Utah! Linda

    2. Paula I hate to hear that. Everyone I know is struggling regardless of crop. Even simple native grass hay farmers are having to make serious adjustments.
      We jumped and bought all our feed till March and are buying our hay next week till spring too. Otherwise we won’t make it.
      Everyone I know around here either grew less, took out bigger loans or just walked away. We the consumer will not see the real bad until after harvest through next year because we are still operating on current stocks.
      It’s worse on fuel than the Carter years because at least they tried to fix it. This admin is wanting it to break so the can go electric. I just don’t know but y’all hang in there and do what’s right for you.

  5. Linda,
    The “density” of gasoline does not change from morning to night. The storage tanks are buried in the ground at 95% of filling stations, and remains at 56 to 60° all the time. That makes no difference in the density of gas no matter when you buy it. This makes no difference on how your gas mileage works out, it remains the same. This is another old wife’s tale that persists and is not true. It does expand in your tank when the temperature rises above 65° and can cause a problem when you over fill your gas tank. When the nozzle clicks off the first time, stop filling immediately because the excess will evaporate off, and you waste money and perhaps cause a fire hazard from the evaporating gas fumes.

    1. Hi Fred, thank you for this great information. My dad made brake pads as I remember and he always told us to stop filling the gas tank with the first click! Thanks for the reminder and the great tips you shared! Gas mileage right now, we never every tip! I love it! Linda

  6. Yes the old tanks use to have gunk at the bottom all the time but if you have old gas on the bottom of your automobile and it’s bin siting for a while top it up with new gas just to insure a good start, you could top it up depending how much you had in there a half to half ratio would work, allso never run your car to empty restarting it could ruin your fuel pump.

    1. Hi Jack, thank you for that great comment. Yes, I always recommend keeping your gas tanks 3/4 or full at all times. Ten years ago I recommended keeping it at 1/2 full, that’s what my dad taught me. Things are worse now. Thank you, Linda

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