For drivers filling up their tanks, constant gas price jumps are frustrating.
But why do we see price hikes so often? And how do gas stations decide the price point?
Everyone knows the pain of having to fill up when gas is at its peak.
Right now oil prices are at their highest level since 2014 and that is just one reason why drivers here are paying more at the pump.
“Gasoline prices are rising because crude oil prices are rising,” says Dr. Robert Guell, Economics Professor at ISU.
The combination of global crude oil prices being up partnered with increased demand is causing the price drivers pay for gas at the pump to rise.
No matter where you chose to fill up, if you are in the valley it is likely coming from the same place.
“You are getting gasoline that has been refined in Robinson, Illinois. Regardless of whether you go to BP or Shell or Marathon or anybody. You’re getting it from basically the same source,” says Dr. Guell.
Most gas stations mark up the price of fuel using the same formula.
Drivers like J.R. Slavens are looking to get the most bang for their buck per gallon, “I mean whenever it is time to fill up I have to fill up no matter what. So I use gas buddy and if there is a place that is close by then I will go there to get fuel.”
It is common that around major highways and during holiday weekends gas prices are higher. Dr. Guell says that is just the basics of supply and demand. “There is no collusion in the world of gas prices. The gas stations buy their gasoline from the refineries, their mark ups are very small,” says Guell.
To combat the high gas prices Slavens tries to use a more practical vehicle, “it is a little diesel so it gets a lot better fuel mileage than my truck does.”
Every March, gas prices typically rise because refineries have to change the oil formula to a combination that suits driving in the warmer temperatures.
It also happens that the price of gas seems to randomly fluctuate with no rhyme or reason to drivers. Although it is happening less often than they did ten years ago, it’s often tied to production issues at local refineries.