Factors that are impacting Gasoline Prices

With gasoline prices reaching horrifying stages, lots of people would prefer to know what things are affecting and determining the price increases. Gasoline prices may not be brought in as a mere fashion as just any other product. There are certain factors that, when impacted, can help bring about the rise to gasoline prices. Here are those factors:

Crude Oil
Gasoline derives from crude oil. A mass of the crude oil provision for the global market is located in the Middle East. This region takes control of about 40 percent of the world's supply of crude oil. However, in the Middle East, there is a firm organization called the OPEC (Organization of Petroleum Exporting Countries) that adjusts the price of crude oil created by their member countries. The OPEC also adjusts the speed of production at which each member country should try to arise periodically in order to assemble a secure enough supply according to demand.

Refining
The price of crude oil is dictated on a barrel basis. One barrel of crude oil bears 42 gallons which is then refined to make gasoline. Each barrel of crude oil then holds approximately 19.6 gallons of gasoline. Remaining yields include the distillation of fuel oil, residual fuel oil, jet fuel, and other products. The refining process may also impact the price of the end product.

The price of oil in the world market is always on demand for it. When there's an increasing call for gasoline in many regions of the world, especially in the United States, crude oil prices tend to escalate. The price of crude oil may also be impacted by political events in some major areas of the world. Local battles especially in diverse oil producing countries may also have an effect on its price. This may have an effect in the world provision of crude oil.

Distribution and Marketing
The distribution process that accompanies providing the crude oil from suppliers to refineries to the retailers who sell it to consumers can have a substantial effect on gasoline prices. On average, distribution is responsible for about 10 percent of the gasoline price. Distribution moves into a long process from crude oil to the end product, which forces it to be one of the important factors that touch on gasoline prices.

The distribution process usually begins from an oil producing country transporting the crude oil to several refineries overseas. The refineries then transport the gasoline into a series of pipelines inland that lead to many of the major consumer areas. It's here that the gasoline may also be further blended or refined to correspond with certain local regulations. The finished product may then be deported to several retail outlets where the cost is set according to certain elements such as supply, demand, and competition.

Taxes
Gasoline prices may also be impacted by taxes both local and countrywide. The difference in the taxes adjusted for gasoline in different places are also responsible for other places having cheaper gasoline than in other areas. On average, taxes as a whole account for about ten percent of the cost set for gasoline.