The average price for a gallon of gas in my area is $3.20, and it has been that price for weeks. Yet, the price for a barrel of oil is now $55 and it continues to fall. Something isn’t right.
The average price for a gallon of gas in my area is $3.20, and it has been that price for weeks. Yet, the price for a barrel of oil is now $55 and it continues to fall. Something isn’t right.
Comments
It’s linked to the price of eggs.
Greed
Oil companies: “what are you gonna do, not buy gas?”
Greed, plain and simple. The corporation will always maximize its profit margins, it’s mandated by law that they do so.
Don’t worry when everyone loses their jobs and are broke gas will go down then…. Thanks trump..
We haven’t built a new refinery in close to 50 years. It doesn’t matter what the price of oil is when there is limit on how much can be refined. The prices would be a lot more if we didn’t have fuel efficient and electric vehicles. Also, the refineries are switching over to their summer time blends.
Greed by stations. And the price reflects the barrel and not the refining process and fuel in the trucks delivering it today. So there’s a delay. Until they announce record barrel prices then the station increase prices immediately because of said greed.
Look up the topic of hedge contracts. Refineries buy, and oil producers sell, the vast majority of the barrels of oil we produce on fixed contracts that change across time according to the market “strip pricing”
Check out the right side of this webpage here for Nymex crude https://www.rbcrichardsonbarr.com/
There is plenty of crude that is sold exposed directly to market prices but even at that it work like anything sold in the month of April will be paid for by the crude purchaser May1st at the average price of oil at the end of every day of April.
Just like every other business, volatility is the nemesis so these contracts give both sellers and buyers some measure of stability exactly so the price of gasoline doesn’t swing wildly week to week.
America will see the other side of this in a year or 2 when oil goes back above $80-90 and gasoline doesn’t instantly spike alongside it.
Gas will go down slowly here. Gas will go back up slowly there. Hedge contracts are what is as play.
The gasoline that’s at your pump was refined before the drop in oil prices. It’s been a week.
It’s been a week. You won’t see the prices drop until the deliveries to your local station is from the refined New oil.
Is it true that the US has vast amounts of oil? Source, neighbor who works in O&G.
It take a good couple of weeks.
50% of the price comes from the cost of crude oil per barrel. However, the rest is pretty much based on supply and demand. It’s spring and people are driving more, which increases demand significantly. Refinery costs are about 25% of the total cost, and they have to output the gas to keep up with demand. So you factor in all the labor to drill the oil, make the gas, and deliver it to a station with the increased seasonal demand load, and it negates pretty much any losses on the per barrel cost.
Oil companies are also notorious for “accidentally” limiting supply by claiming refinery issues and shutting down production during peak demand, so it’s not always a natural market force at play.
Because rich people need money!
I just assume it’s the gas companies saying “you’re going to buy gas no matter what”
state taxes
your state governer is taking your savings
Not so long ago, barrel of oil was below $0, and local gas was $3+ and I wondered the same question
…greed
I think we found one
$3.20 for a gallon is cheap …
sorry, the oil company’s will see that as pure profit
Falling oil future spot prices don’t change what the station selling the gas paid for the gas currently sitting in their tanks. Oil futures dictate a delivery price in the future, not right now. Refiners will try to hedge by buying contracts for future delivery date. What they bought the oil they refined into gasoline was set months ago at a price that’s likely higher than the current spot price. Let’s say the refiners bought the oil at $71 a barrel and refining the gasoline and sold it to a gas station. The gasoline in the tank is based off a $71 oil price, not the current $55 price.
It has dropped close to what one would expect.
Over the last few months oil has dropped by about 22% but that doesn’t mean gas will drop by 22% because the price of oil only makes up about 50% of the cost of gas so you would expect it to drop by maybe 11% or so when you do all the math gas is maybe 10 cents per gallon higher than you would expect which could be a myriad of factors
Hello! I used to man a desk reporting the physical gas and oil markets.
There are several factors that can affect the spread between crude and gasoline. The biggest is the RVP schedule – basically, there are several grades of gasoline that are used in summer or winter, based on the temperature that they would boil off (you don’t want your cheaper winter gasoline to evaporate out of your car on a hot summer day). This is not the octane of regular vs premium, but a separate quality.
The gas grades change multiple times a year depending on where you live. Usually, changes in crude input costs at a refinery change with the product outputs, but the supply and demand factors on the availability of your current gas grade, especially at the end of the rvp calendar phase, can break away from these economics.
Also, several other factors can affect the price at the pump, like ethanol blending costs at the rack, and your local gas station not wanting to drop the price if they can get away with it.
Refineries is the main culprit. Lots of Refineries closed temporarily during covid that are still closed today. So regardless of crude oil prices the supply of gas is being bottle necked
‘Crude oil’ prices are misleading as it’s not the price that anyone actually PAYS for anything. No one is trading crude oil back and forth, it’s still in the ground when it’s in crude form.
How analysts arrive at the price is to take the end selling price of refined oil and subtract a bunch of costs related to the related to the refinement and extraction of oil. The crude oil price is the remainder, mean to be a proxy for what the unrefined stuff still in the ground is hypothetically worth. The problem with that? Those costs vary considerably from place to place. Every oil drilling spot has its own unique cost structure. So those crude price quotes can be really misleading.
Actually a pretty smart question.
must be regional, i only pay around $2.70.
The companies want more money, not less
Because when oil prices go up, they have to immediately increase the price of gas to not go out of business, but when prices go down, they’re selling virtually unlimited stock of gas made of expensive oil they HAVE to sell for the higher price or they’ll go out of business and it takes time for prices to adjust.
They’re greedy fucks, that’s why. And it’s not like you have an alternative.
Literally asked this question yesterday as I saw gas prices were going down and now we’re at almost $4 a gallon again.
Because we don’t buy oil at the pump. There’s still a refinement process. And the business world hates uncertainty and we are definitely in uncertain times.
You should fell lucky paying only $3.20/gal. Where I live it’s $6/gal for the 87 octane.
https://www.gasbuddy.com/home?search=95521&fuel=1&method=all&maxAge=0#:~:text=J%20StArcata%2C-,CA
cries in so cal at$4.89 a gallon
Gasoline you buy today was made with oil that was bought a couple of months ago or more. It always lags a bit.
Greed
You think that’s high?
The tax on a gallon in the UK is likely higher than that.
A barrel is 42 gallons but not all of it becomes gasoline (however a lot of it that isn’t turned into gas gets turned into all sorts of other products). It needs taken to where it’ll be refined, likely by pipeline, then it needs refined, then it needs transported to where it ultimately will be put in gas tanks and last-mile service is pretty much always by truck, then the gas station itself also wants to make a little something since they have to operate and maintain tanks and a pumping system.
Then there’s supply and demand affecting it, the realities of limited production capacity, it’s pretty volatile and doesn’t store well, there’s taxes baked into the price…
Honestly for 2025 $3.20 is cheap. It was more than that 20 years ago even for dollars going further.
Tariffs.
That’s not the actual reason, but it makes for a heck of cover story.
Greed is the actual reason.
Because they can. Simple as that
The current gas in the pumps was purchased at a higher price. Once that gas is used, the new gas, which will be purchased at a lower price, will be cheaper. Keep in mind the summer blend is also coming out, which always tends to be more expensive.
Corporate greed. It always has been corporate greed.
Refinery switchover to summer blend.
Crude oil is at 55$ today, but what you’re buying right now is refined oil that was bought at a higher price a few weeks (or even months) ago.
The prices aren’t inversely proportional. From what I’ve gathered, there’s a group that decides prices based on maintaining reserves and supply to maximize profits.
You have no choice… even if they lower the price, it would still be higher than the last price before any increase. What are you going to do.. Stop buying gas lol
So it’s say £10 a gallon, then they put it to £15 a gallon.. Then later on the say the price has come down they relist it as £12 gallon, So you’re tricked into thinking the price is better and the gas price is better, and they still have a huge profit
yes Im simple
That $55.00 is a futures price of crude oil. The there is currently a decline in Unleaded Fuel due to a number of see refineries being offline and the switch to the summer blend.
Gas prices go UP fast, but are “sticky” on the way down. I’m only buying half a tank until the effects of the recent.drop in oil prices is reflected at the pump. I give it about 5 to 7 more days before a price war breaks out between local gas stations.
But, but, but, the President controls gas prices.
Because of the very scientific process for setting prices me and the other bodega owners use, checking how much the closest competition is charging, and unless they are hard to get into from the street, set mine a penny or two lower (if they are difficult to get to I match them or don’t care). In all seriousness though, the process of getting gasoline in your tank is a miracle of modern logistics and that, as with just about everything, is the majority of the price.
Corporate greed, that maga says doesn’t exist
Profits.
In capitalism, prices go up and down with demand…to companies buying in bulk.
But companies like Walmart always need MORE profit. Once they raise a price, they aren’t going to lower it unless you show that you won’t buy at that price (you being the consumers as a whole, not you specifically).
Companies are essentially saying: yes, the price for us got cheaper, but you’ve already showed us you’ll buy at this price, so we’re going to keep it at this price to make our shareholders happy.
Also also, if we break it down further, why would a company make ten units of something to sell at $10, when they could save money, produce one unit, sell it for $100 because they know one person will buy. Obviously, this could create issues down the line, but if the companies are just looking for quick profit now, they can do this.
Think gaming consoles always being sold out at launch. It artificially drives up the price since there isn’t enough supply to meet demands. After the price is artificially raised, they release a bunch, people buy, and then they reduce the price as sales drop over time.
Unfortunately, it all breaks down to the economy and people running it not giving a single fuck about you, the individual consumer.
Because politicians have conditioned the public to believe that oil trading prices have a correlation to what you pay at the pump and what’s even worse than that are the pleebs that belive that the inhabitant of a house on Pennsylvania Ave. actually has anything to do with it at all.
I’m,sure there are “valid” reasons but gas prices always seem to magically react to rising oil prices much faster than they react to falling oil prices.
Because inflation is 40% corporate greed and profit. Just because they pay less does not mean they have to pass on those savings to you.
The price if gas is cheap. It’s the state taxes on the gas is what makes it expensive
Prices at the pump don’t change dynamically. If the barrel price remains low prices will follow. However, local and state governments may raise taxes at the pump to offset losses in other tax revenues. Thus keeping prices higher at the pump.
Because gas stations exist to make money.
If you want to save money gas you should utilize gas apps.
Why would any business ever charge less for what everyone is already paying? It’s corporate greed.
Gas prices rise like a rocket and fall like a feather.
The price of crude is only 55% or so of the cost of gas. The remainder is marketing, distribution, refining, and taxes
Gas is cheaper in Canada right now than I can remember, other than during the peak covid lockdowns.
When the price of crude goes up, the price at the pumps goes up the same day.
But when the price of crude goes down, then they justify not lowering the price at the pump because you know we have all those gallons of gas that we bought at a higher price and the new cheaper crude has to be refined and distributed before it arrives at the pump…
it’s really cheap where I live. just went down 10cents
Last time I filled a week ago, gas was up
Rocket and feather
Refining capacity has been near or above 90% for quite awhile. That oil has to be refined into gasoline after all.
As others have commented, the price rises immediately when oil goes up and falls slowly when oil drops. Another factor at play is that there is less competition, so the price decline is getting slower and slower. Near me there are maybe five major retailers whereas before there might have been ten or more.
Also, refineries are transitioning from the mix they sell during the winter to the mix they sell in the summer so that transition often increases prices.
What? Gas prices are down dramatically for me lately.
The barrel of oil bought yesterday won’t show up at your gas station for a few months.. You’re buying gas today made from oil purchased months ago.
There’s nothing that requires oil companies to reduce prices. Why should they?
Speculation
When it goes up it’s almost instant, when it goes down not so much. Can we get some lube please .
Because fuck you.
Tariffs
Dunno about you, but my vehicle doesn’t run on straight crude.
Greed.
They’re slow to drop prices to protect profits. Quick af to raise them, though.
When production costs increase, companies raise prices quickly, like a rocket. But when production costs fall, prices fall slowly, like a feather.
It’s not an instant translation. The gas getting delivered to the station this week was refined weeks or months ago when oil prices were higher. If Brent crude stays low, gas prices will float down after the cheaper gas starts getting delivered.
My local price was around 2.70, jumped up to 2.90 again over the last week. Average (in US) is 3.37, up ~2.5% from last week but down ~7.3% from a year ago (info from ycharts). The average always drops around January and goes back to a peak in the summer, so we can expect prices to rise more (depending on everything going on of course)
It takes weeks for cheap oil to work its way through the system. It takes four nanoseconds for expensive oil to wend its way to market.
Local gas taxes. Leftist politicians can’t allow the prices to actually appear lower so they’ve increased the taxes and other regulatory costs on gasoline and related infrastructure where they are able to. This has led to an interesting dynamic, the more they mistreat their constituents by raising their taxes and making everything they do be more expensive as a result… the more votes they get because of the people who are too dumb to add all the numbers together and have therefore been tricked into believing that true prices haven’t actually gone down.
Helps to have a media on their side who will militantly avoid pointing this out also.
Companies have to sell what they already made while the buy price was high or else they would take a loss, that’s likely why. They are slow to fall but quick to jack up the price.
Cause at the value of the dollar we will probably always be around 2.75-3.50 bare minimum. Gas will never be under $1 unless the government does what the Saudi’s do and subsidize their commercial gas so it’s still Pennie’s a gallon. If we can’t get healthcare no one is going to be willing to use taxes to make gas cheaper
Refiners are switching to the summer blend and thus supplies are low right now. The last two weeks the gasoline inventory in the US fell significantly. When refiners switch they also take downtime to do maintenance so there is a couple weeks of zero production. So it’s natural prices rise. Also summer blend gasoline cost more to produce as they add more oxygenated like MTBE or Ethanol to meet the EPA requirements. So prices are not coming down for another few weeks. Here they have come down about half of what they rose.
It takes about a few weeks to a month for gas prices at the pump to fully reflect any changes in “price of a barrel”. Also, you have to keep in mind that while current price in Texas is $2.79/g, it’s $4.99 in HCOL areas, say Northern California. This is also reflecting the relative costs to deliver that oil to refinery, refine it into gas, and deliver it locally (plus higher taxes). Each price point along the supply chain has to adjust, based on upstream costs. If we knew with certainty how much each refiner paid, per day, for a barrel, it would be easier to predict pump price, but, we don’t know these costs because they jealously guard their information about costs, so they can more easily rip us off.
Profit
Oil is $55 today. It wasn’t $55 at least a month ago when the gas being sold today was refined.
Went up every single day. Last time orange man was in office.
The price you see is for a future delivery, it’s a futures contract for May or June
The price of oil is the price of next month’s shipments
Gas prices don’t always move directly with oil prices because there are other factors involved, like refining costs, distribution, and taxes. Even though oil prices are falling, it takes time for those changes to show up at the pump. Plus, gas stations may not lower prices immediately because of local competition or supply chain issues.
greed, tariffs and greed
There is usually a 1-2 week lag in pricing, especially when its falling.
Price of barrel of oil is not the whole story. Shipping and refining is a big part of pump price, too. If tankers are being taxed or postprocessing costs like energy increase, that can affect cost. There is also company infrastructure of the distributor and inflation… Or other more worldly things like instability/corruption in a primary source country. Finally, could be straight up price gouging in favor of share holders.
Take your pick, any one of those could be correct… Gas company will never tell you. Thank goodness there is no (major) monopoly in oil refinement. The competition between the production and distribution companies is what drives down price after barrels enter the market.
Greed
Corporate greed?
Because people will pay it.
They are going to charge the highest price they can get for it.
As a business why lower price if you can still sell it at the higher price? The only way the price at the pumps will drop is if competition starts a bidding war of sorts to push the price down.
Because they know you will pay it.