America is suffering high gas prices with barely any relief in sight. The price at the pump is enough to make people limit travel.
So why is it that when the price of crude oil - where gas originates - is dropping, the cost of gas isn’t?
To get gasoline, companies first refine crude oil. The refinery process costs time and money; raw oil makes up 59% of the price of a gallon of regular gas. If that’s the case, when a barrel of oil drops dramatically in price, the cost of gas should, too, right?
Most of America’s gasoline - just over 40% - is produced at home. One big reason that gas is so expensive is that the vast majority of gas and oil is privately owned by corporations meaning each company can produce and charge as much as they want.
This is especially true as no specific policy or organization regulates the industry in the U.S.
While other outside forces can also affect the price of gas - like war and global politics - private monopolies on oil and gas keep prices high. So when gas prices rise again pay attention to how much a barrel of oil is at the time and who’s benefiting from high gas prices the most.