Gas prices change within the year thanks to a range of factors. These factors affect the prices of crude oil - something that is directly reflected at the pump. Prices are not the same throughout the world and the reason for this, varies according to that region. Trying to understand what affects the price of gas at the pump, will be the focus of this guide.
Supply and demand
The supply and demand of oil can affect the price. OPEC both controls the supply and therefore, the price. If the demand increases, then OPEC must deal with this. This change in need can also affect the price. When there is more demand, the price rises.
Gas prices and geopolitics
Geopolitical events can affect gas prices as well, such as hurricanes which shut down oil refineries. When production goes down, this can result in a spike in prices thanks to the demand remaining high and not being met. Conflicts in the Middle East can cause disruptions in oil supply, which can affect prices hence making them rise. Political instability can also cause prices to rise. In less populated areas of the country, gas prices may be lower, while in more populated areas of the country, the prices will be higher thanks to higher demand.
How to act
Cheap electricity When the price of oil rises, then the price of electricity rises as well. In order to combat the rising prices, customers should monitor the consumption of electricity and energy. Better appliances that utilise energy better, better insulation in the houses, better bulbs and other efficiencies can result in cheaper gas bills and electricity bills. This is especially important with the approach of winter when weather stripping can help to seal cracks around windows which, in turn, can help to make the building more efficient and require less energy to heat. Thick curtains can help to keep out drafts. Switching to more gas-efficient cars can help to lower prices as well. With more efficient vehicles, less gas will have to be used. More reliance on public transportation reduces energy costs, as well as travelling shorter distances. This is made easier in more populated areas like cities where public transportation is in force.