How to save money AND fuel
The Heat is On. How to Prep Your Car for Summer

Gas prices go up and down, but what causes this? And how are prices set in the first place?

Crude oil is a commodity, like coffee or wheat, with prices set on global markets. Just as a poor coffee bean harvest can increase the price of your morning coffee, when something significant happens to the supply of crude oil or gasoline, prices may be affected. Local competition is a big factor too. If one site drops the price to get more business, other sites in the area may adjust their own prices to keep customers from going down the road. So retailers continuously monitor and adjust prices to remain competitive.

Crude oil is not the only factor in setting the price we pay at the pump. Wholesale gasoline is also a commodity that’s traded on markets, so local market forces play a significant role in determining the retail price for fuel. Another significant factor is taxes, which vary both within Canada and around the world. In Canada, every province and even some individual municipalities apply taxes at different levels, which can contribute to the regional differences you see at the pump. In the U.S., there are also federal, state and local taxes, but often at much lower levels than in Canada.

Let us know if you still have questions!

Comments

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snow

Your rendition of gas price and compitition, smells like someone is dreaming.as for the past 45 years every major station in every province has been pretty much the same price right to the tenth of a cent. Supply and deman what you are on about is also a bit of a missnomer, as the Saudies love the steady income and stability they enjoy, They also indicated that any disruption caused by the termoil in their country would be off set by thier upping production. That is why when there was a huge gulf oil rig blow out that prices were not even affected by 1 cent. furthermore the gready SOB,s that push the price of oil up by buying futures only tend to screw over the small investors mostly as they all sell and let the little guy hold the bag. So here is a good thing to consider,as a consumer, Stop filling your tank up all the way, only put in 1/2 A Tank or a little less, that way. you save a little on having to transport the extra weight around town while driving and further more you will cause the non existant holding capacity of the refineries to overflow,instead of using our tanks as the holding capacity. there have been no new refineries developed over the past 20 years in the USA nor for that matter in canada. so when production is slowed down, people who work there will start to be laid off and drivers who deliver in large trucks that haul fuel will no longer be needed to the full extent , then prices will drop and the big guys that caused the price jump in the first place may get burned for a change!

Arno Zeiser

The argument about crude oil not being the only contributor to the gas price is only partially true.

Yes, every time the crude oil drops the gas prices move (if at all) a lot later. Strangely enough, every time the crude oil price makes the slightest move upwards the price at the pump does the same immediately. If the argument truly would hold then at least the time delays of decreasing prices would be the same as with prices moving up.

James

The price of Crude oil recently dropped by ten dollars yet the price of gas remained the same quit lying.

andrew

is the price of gas ever going to drop when will the gas companies realise that if they drop the price then you will have more sales low budget familys can not aford this annymore

vic

I hated how the price of gas kept creeping up and up, which is why I just don't drive anymore. The only time I drive is if it is over an hour ride, or if there is a skyway/highway in my way.

But, what I also hate is how people complain about the price always increasing. I was like that before, until I just stopped driving.

Yes, everyone has different situations. I dont have kids. I don't have a family to look after. I don't live close to the city's downtown, but I am also not in the country, so I am able to commute through other means. But, everyone needs to realize that they have options and choices.

If you have a family, invest in a smarter car. If you are broke and cant get the car, then finance it when interest is low - or just simply cut down your driving. You will either become broke buying a smarter car that would pay off, or you would become broke by buying gas at ridiculous prices.

POINT: You are not only buying a car, you are making an investment. And the definition of investment is: making money. So you will end up saving money.

Not only does the governement need to adapt, but so do we by making smarter choices.

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