No matter where you live, the cost of filling up your car with gasoline has increased in recent months, which has some consumers asking: “What’s causing this spike in gas prices?”
A number of factors help dictate the price of gasoline, but the cost of crude oil on the global marketplace is the main component, and crude oil prices have been steadily rising. With current economic conditions improving worldwide, global demand for oil is rising, leading to the higher prices we’re seeing today.
Gasoline prices are also affected by other factors, including weather events, inventories, refining and distribution costs, marketing and taxes. For example, every time U.S. motorists pull up to the pump, they pay an average of 48 cents in state and federal taxes per gallon of gasoline.
One way to address the issue of higher prices is with more supply. Increased production of America’s oil can put downward pressure on crude oil prices and therefore, the cost of producing gasoline. Yet despite this, project delays, drilling moratoria and lease sale changes have created an environment of uncertainty for U.S. companies, impeding our ability to produce U.S. oil and natural gas resources.
As our economy recovers from the recession, policies that support domestic oil and natural gas development will help ensure we have the safe, reliable and affordable energy, jobs, and revenue our nation needs now and in the future.