Gas Prices are Insanely High Right Now, Here's Why

Gas prices have surged in the past few months, and on Nov. 17, the Biden administration announced that it had asked the Federal Trade Commission to investigate if oil and gas companies were manipulating the prices.

Republicans have countered that it is a "cheap political stunt," and they blamed the energy policies that President Joe Biden implemented.

Gas Price Increase

Experts claimed that the increase in prices is not as easy as what the Biden administration made it out to be. The biggest driver is not oil companies or politicians, Business Insider said.

Instead, the gas price surge is driven by investors' issues in the United States and international producers.

The cost of gas has increased 50% compared to 2020, according to data increased by AAA. That same data shows that the average price of a gallon of gas in the United States is $3.41, but a gallon is even more expensive in some states.

California is the state that has the most expensive gas, as it costs $4.70 per gallon.

Democratic Senator Ed Markey posted on Twitter that Big Oil is fueling climate change and getting money away from struggling individuals with high gas prices while spending massive amounts of money lobbying climate deniers and preventing the government from switching to a cheaper and cleaner alternative.

Meanwhile, the American Petroleum Institute, known as the oil and gas industry's largest lobbying arm, blamed the Biden administration for canceling important infrastructure projects like the Keystone XL pipeline.

Gizmodo reporter Molly Taft interviewed Clark Williams-Derry, an energy finance analyst at the Institute for Energy Economics and Financial Analysis, to talk about the reason why the cost of gas increased. He reportedly said that the simple explanation is the cost of oil and refining it is added to the cost of getting it to the refinery from the gas station.

Aside from that, the cost of running a gas station and the taxes they have to pay are also why gas prices increase.

There are a lot of variables that go into finding out how much each of the costs of the said steps is. However, the price of oil is usually getting the attention due to how much it can change in seconds, according to Forbes.

Crude Oil Prices

Crude oil prices are part of the majority of the price that you see at gas stations. Even a bit of an oversupply or a little less oil on the market can have a shift in global prices.

Contrary to what the fossil fuel supporters say, both oil and gas supply does not have a perfect market.

Internationally, oil production is controlled by a literal cartel known as the Organization of the Petroleum Exporting Countries or OPEC.

The coalition of 13 oil-producing giants, including the United Arab Emirates, Saudi Arabia, Venezuela, and Iran, influences the production and prices around the world. As of 2018, OPEC controlled 79.4% of the world's oil reserves.

Meanwhile, in the United States, investors in American gas companies have a lot of say on what producers in Texas and other states make.

The gas prices aren't always high. In 2014, gas prices had hit an all-time low. In the summer of 2014, gas prices remained low.

This article is owned by Tech Times

Written by Sophie Webster