Does it feel like you’re paying a little more for a tank of gas these days? You’re not wrong. Gas prices are up, and they’ll continue to rise as summer nears. But relief is on the way.
At Life:Powered, we get this question a lot: If the oil and gas industry are so great for the economy, why do gas prices keep going up?
According to AAA, the national average price for a gallon of regular unleaded gas, as of this writing, is $2.895. Our home state has it better than many others, where bad public policy choices have left families paying far more for fuel—in some places, double what Texans pay.
Crude oil prices fluctuate based on many factors, including projected supplies, expected demand, even guesses about foreign political trends. This is just one reason American energy dominance is good news for your wallet: producing more of our own energy means we’re less reliant on unstable or hostile nations.
Other cost drivers include government regulations on fuel blends. For example, the Renewable Fuel Standard (which requires more ethanol to be blended with gasoline) has dramatically reduced the actual energy content of a gallon of gas:
Bad public policy leaves families paying more at the pump — and that’s even more clear when you compare cost difference by state.
Texas’ average price per gallon is $2.617, which is actually down from last week but up from a month ago. Meanwhile, Californians pay an average of $4.094, with some cities seeing prices higher than $5!
California’s laws makes it tough to drill for oil or even transport it to the state’s few remaining refineries. The last time California allowed new refinery to open was 1980, and it produces a tiny fraction of the 42,500 barrels per day of Texas’ newest refinery in Corpus Christi. California’s outgoing governor also just signed legislation “blocking new leases for offshore drilling projects along the state’s coastline and banning any new systems to transport gas or oil, including pipelines.”
None of these policies make the fuel we depend on for nearly every activity of modern life any more accessible or less expensive. Meanwhile, the Lone Star State has embraced its thriving oil and gas reserves and just became an energy exporter.
Californians can’t hope for relief soon, but the rest of us can. AAA reports that crude inventories are at a record high, and that’s good news for drivers.
“Growing domestic crude stocks could play a role in helping to keep gas prices low this summer, since crude comprises roughly 50% of the cost American motorists pay at the pump,” AAA explains.
But record oil production in Texas is helping to keep prices low.
To recap, here are the five key reasons the price of gas fluctuates:
- Projected supply
- Expected demand
- Geopolitical trends
- Federal and state regulations on drilling and refining
- Ethanol and other gasoline blending mandates