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The author of this article is Carmen Ang, a General Interest Writer at Visual Capitalist.

Jerry and CJ recently spoke about this topic during their recent podcast (Bantering Bosses Episode #2). We thought the infographic image below was an excellent overview.

The Four Factors that Influence U.S. Gas Prices — https://elements.visualcapitalist.com/wp-content/uploads/2022/06/The-Four-Main-Factors-that-Influence-U.S.-Gas-Prices_v5-1.jpg

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The four main factors that influence the price of gas are:

According to the EIA, there are four main factors that influence the price of gas: Crude oil prices (54%) / Refining costs (14%) / Taxes (16%) / Distribution, and marketing costs (16%)

Canada is a net exporter of oil, however, in Canada here, we still do import oil from other countries. The United States are net importers of crude oil and because of this gas prices in the United States and even Canada are very reliant on the global crude oil market.

OPEC (Organization of the Petroleum Exporting Countries also plays a major role influences this global market.

Established in 1960, OPEC was created to combat U.S. dominance of the global oil market. OPEC sets production targets for its 13 member countries, and historically, oil prices have been linked to changes in OPEC production. Today, OPEC countries are responsible for about 60% of internationally traded petroleum.

Refineries have become a polarizing topic as the environmental standards have increased in North America. These costs can vary from refinery to refinery. Certain places have shut down throughout the pandemic and further tightened the supply of oil.

In Canada and the United States taxes also play a large role in the price. Canada has recently added a carbon tax that increases the prices at the pumps. You can read more about the carbon tax in Canada here (CTV News: Carbon tax increase: How will it affect gas prices?).

Distribution and marketing costs are also included. This is an important point below that gas station owners are not necessarily raking in money when the price of gas goes up.

Gas stations then distribute the final product to the consumer. The cost of running a gas station varies—some gas stations are owned and operated by brand-name refineries like Chevron, while others are smaller-scale operations owned by independent merchants.

The article linked and mentioned above was posted on June 10, 2022 by Elements Visual Capitalist, written by Carmen Ang. Check out more great articles at Visual Capitalist here.

This article was prepared by CJ Stevens and Jerry Kallitsis who are both mutual fund representatives with Investia Financial Services Inc. This is not an official publication of Investia Financial Services Inc. The views expressed in this article are those of the author alone, and are not necessarily those of Investia Financial Services Inc. The content is for informational purposes only, you should not construe any such information as legal, tax, investment, financial or other advice. All content on this site is information of a general nature and does not address the circumstances of any particular individual or entity.