Why are Gas Prices Going Up

As you know, the global economy has been in turmoil recently, and this has led to higher prices on nearly everything, including gas. Though President Trump claimed that he would bring gas prices down to $2 per gallon, this hasn’t been true so far, and experts don’t see it becoming true anytime soon. So why are gas prices going up? First, let’s look at the three main factors driving up gas prices.

The ever-changing gas prices

The gas prices change on a daily basis, based on the amount of gasoline that is sold. When demand for gasoline is high and supply is low, the price goes up. This is because there isn’t enough supply to meet the demand, so it costs more to get less. When supply is high and demand is low, the price goes down. This happens when there’s plenty of gas to go around and it takes less time to transport it.

 Gas prices increase when there is less supply: When demand is high, there aren’t enough refineries around to make enough gas to meet that demand. Instead, people have to drive longer distances to get gas or pay more at their local station. There might also be long lines at stations because of high demand and fewer refineries. Since it takes time for a refiner to set up and start making gas, especially in high demand periods like summer, you have to pay more for gas during those times.

 GAS PRICES DECREASE WHEN THERE IS ENOUGH SUPPLY: Sometimes gas prices go down because there’s a lot of supply, which means refineries can make more gasoline than people actually need. This happens in winter and early spring, when demand for gas is low and there are more refineries around to make it. When demand isn’t high but supply is plentiful, prices tend to decrease.

Determine how much you can afford to spend on gas

Since gas prices are going up, it's important to know how much you can afford to spend on gas. Here's a breakdown of how much you should be spending every week.

 The average cost of a gallon of gasoline in America is $3.75. This doesn't include tax, which can vary from state to state. If you live in California or Alaska, for example, where gas prices tend to be among highest in country, you might be paying upwards of $5 per gallon. In some states like Illinois, Georgia and South Carolina — where there's little to no sales tax on fuel — your cost could actually be lower than that national average.

 The amount of money you spend on gas will vary depending on what kind of car you drive and how far you drive it. If your vehicle is a fuel-efficient model that averages 30 miles per gallon, for example, you'll be spending less than someone who drives an SUV or other high-mpg vehicle.

Get the most value out of your car purchase

If you want to get the most out of your car purchase, buy a used car. The average person who drives 15,000 miles per year will spend $500 more on a new car than they would on a used one.

 A new car depreciates an average of 15.9 percent as soon as you drive it off the lot, which means that by driving a 15-year-old car, you will be saving thousands in depreciation costs over five years. The monthly costs associated with your vehicle also drop significantly when buying used vs. new: New cars lose value much faster than used ones and therefore have higher monthly payments.

 You'll also pay less for insurance with a used car than you will for a new one, as insurers factor in vehicle depreciation when determining your premiums. If you're financing a new car, you'll be paying interest on both its sticker price and how much it loses in value every year; that's called negative equity.

Choose a fuel efficient vehicle

Gas prices are going up, and it's costing more to fill up your tank. But there is a way you can save some money. Buying a fuel-efficient vehicle will help you save on gas costs in the long run.

 Here’s an easy-to-remember rule of thumb: The farther you drive each year, and/or the more powerful your vehicle is, the more important it is to purchase a vehicle with higher gas mileage. The EPA has estimated that driving a small SUV less than 5,000 miles per year could actually cost you more in fuel costs over five years compared to driving a small sedan that averages 30 mpg or higher.

 Calculating how much you spend on fuel every year is simple. Just add up how much you spent on gas in a given month, or divide your total gasoline costs by 12 to find out how much you spend every month. Then multiply that amount by 12 and add it to your annual transportation costs for an even clearer picture of what owning a vehicle is costing you. The difference between saving and spending money will be a lot easier to see if you have an actual dollar figure to play with.

Carpool with friends and family members

Carpooling with friends and family members is a great way to save money on gas. If there's anyone you know who lives near you, see if they want to carpool with you. You might even want to offer them a ride in the future if they need it.

 Carpool with neighbors and co-workers: If you don't have friends or family nearby, then it might be a good idea to find other people who live in your area that are taking similar commutes. Carpooling with co-workers is also a great idea because you'll save money on gas as well as be more productive during your commute.

 If you work outside your city, consider telecommuting: Most companies today allow their employees to work from home on a regular basis. If your company isn't one of them, or if you're looking for a new job anyway, consider applying for jobs that let you telecommute. Not only will it save you money on gas, but it can also save both time and money since you won't have to commute to and from work every day.

Summary

Gas prices have been steadily going up for the past few weeks. Analysts think that this is due to an increase in demand, especially as summer approaches and more people will be driving. There is also speculation that there could be some issues with production or distribution of oil.