Why does the price of gas fluctuate so frequently?

This is one of the most common question being asked as a economic teacher.

There are several factors that can cause the price of gasoline to fluctuate. One of the main factors is the price of crude oil, which is the raw material used to produce gasoline. When the price of crude oil goes up, it can cause the price of gasoline to increase as well.

Another factor that can affect the price of gasoline is the demand for it. If there is a high demand for gasoline, the price may go up. On the other hand, if there is a lower demand for gasoline, the price may go down.

Geopolitical events, such as wars or political instability in oil-producing countries, can also affect the price of gasoline. If there is a disruption in the supply of crude oil, it can cause the price of gasoline to increase.

Finally, the cost of transportation and distribution can also impact the price of gasoline. If it costs more to transport gasoline to a particular area, it can cause the price to go up.

Overall, the price of gasoline is influenced by a variety of factors, including the price of crude oil, demand, geopolitical events, and transportation costs.

Here is a list of 10 famous gasoline suppliers around the world:

1. ExxonMobil – This is a multinational oil and gas company based in the United States.
2. Royal Dutch Shell – This is a British-Dutch multinational oil and gas company.
3. Chevron – This is an American multinational energy corporation.
4. BP – This is a British multinational oil and gas company.
5. Total – This is a French multinational integrated oil and gas company.
6. ENI – This is an Italian multinational oil and gas company.
7. Gazprom – This is a Russian multinational natural gas company.
8. Petronas – This is a Malaysian state-owned oil and gas company.
9. Sinopec – This is a Chinese state-owned oil and gas company.
10. Petroleos de Venezuela – This is a Venezuelan state-owned oil and gas company.

Here are a few real-world examples of gasoline price fluctuations:

1. In the 1970s, there was a major crisis in the global oil market, known as the “oil shock.” This was caused by a number of factors, including the decision by the Organization of the Petroleum Exporting Countries (OPEC) to restrict oil production and the outbreak of the Yom Kippur War between Israel and its Arab neighbors. As a result of these events, the price of crude oil soared, leading to a significant increase in the price of gasoline.
2. In the aftermath of Hurricane Katrina in 2005, many refineries and pipelines in the Gulf of Mexico were damaged or disrupted, causing a shortage of gasoline in the United States. This led to a rapid increase in the price of gasoline.
3. In 2012, tensions between the United States and Iran over Iran’s nuclear program led to the implementation of economic sanctions against Iran. This caused a reduction in the supply of Iranian crude oil, leading to an increase in the price of crude oil and, subsequently, gasoline.
4. In 2020, the COVID-19 pandemic caused a significant drop in demand for gasoline as people stayed home and travel decreased. As a result, the price of gasoline fell dramatically.