Memorial Day is almost upon us, an annual event that typically triggers another annual phenomenon in the United States: high gas prices. By the calendar, summer starts in late June, but due to rising temperatures and dwindling school schedules, Memorial Day is considered by many to be the unofficial start of the summer season, heralding family vacations, cookouts, and trips to the beach. Whether a summer vacation involves getting into the family car or onto an airplane, fuel makes it possible, and around Memorial Day people use a lot of it. That annual spike in demand also inevitably triggers a spike in gas prices. 

Why So High? 

U.S. gas prices topped the $5 mark—a record high—in June of 2022 during a global wave of inflation. Despite much finger-pointing regarding the cause, no single person or organization decides the price of gas. Instead, a variety of players and factors figure into the equation. We’ll outline a few of those now. 

The Price of Oil 

The gasoline we put in our cars is derived from crude oil. In fact, most of the cost of gas comes from the cost of crude oil itself. 

Refining 

Crude oil must be refined to become gasoline, and the refining process adds its own cost to the pump price.  

Taxes 

Gas is subject to taxation from the federal government down to the local level, and this added cost is factored into the final price. 

Distribution 

Gas must be delivered from petroleum companies to gas stations, so there are associated transportation costs. 

Marketing 

Gas is a product and, like any product, has marketing costs. 

Gas Stations 

While some gas stations are affiliated with oil companies—Shell, Exxon, etc.—many are independent companies that purchase gas from refiners and add their own costs on top before reselling it to consumers. 

Supply 

The amount of available gas is another factor in the price. 

Demand 

When the demand or projected demand for gas puts a significant dent in the supply, the price goes up. 

International Relations 

Foreign policy and geopolitics can cause significant fluctuation in gas prices. For example: Amidst rising tensions between their two nations, President Biden visited major oil producer Saudi Arabia in 2022 to ask the Saudi government to increase oil production and thereby supply. However, the Saudis declined, and gas prices rose.  

International Crises 

International calamities such as Russia’s 2022 invasion of Ukraine can result in skyrocketing fuel prices around the globe. In that instance, the U.S. and other countries introduced sanctions including a ban on the importation of oil from Russia—a major oil-producing country—resulting in a supply shortage that drove up prices. 

Drive Your Career Success With Energy Business Credentials 

Explore finance, law, risk management, and other key business disciplines through the lens of today’s energy industry. Leveraging our decades-long affiliation with that industry, The University of Texas Permian Basin has developed online graduate programs that prepare you to take on coveted leadership roles or magnify your mastery of your existing role in the field. Our AACSB-accredited programs include: 

Online Master of Business Administration with Certificate in Energy Business 

An MBA is a widely respected credential that can make current and future employers take notice. Our online MBA program gives you a broad business foundation through courses covering all key business areas coupled with energy-focused specialty courses. You can complete our 36-to-45-credit program in as little as four semesters—about the same amount of time it would take you to earn your MBA alone—and receive two valued credentials when you graduate.  

Online Master of Science in Energy Business 

Built on a foundation of financial principles, this is an online master’s degree dedicated to the energy business—one of very few university programs of its kind to be offered in the U.S. You can complete our 30-credit program in as little as four semesters

The U.S. Bureau of Labor Statistics reports that professionals who’ve completed a master’s degree enjoy about 18% higher median earnings and are more likely to stay employed than those with a bachelor’s degree alone.  

Online Graduate Certificate in Energy Business  

If you aren’t ready to begin a master’s program, or you’ve already earned a degree but lack the energy expertise you need to achieve your career goals, this stand-alone graduate certificate program was designed with you in mind. In as little as two semesters, you can complete our 12-credit program, which is composed of your choice of four energy business specialty courses. 

Set a Pace That Fits Your Busy Life 

Our energy business programs are presented in an asynchronous online format that allows you to set your own schedule. You can log into the virtual classroom from practically anywhere in the world at any hour of the day to view lectures, take tests, and complete assignments. We understand that you have professional and personal responsibilities requiring your attention, and our online programs reflect that. 

You may not be able to control the factors that influence the price of gas, but you can steer your energy career in the right direction with the right credentials. Begin your journey today! 

Sources: 
https://www.kiplinger.com/personal-finance/604688/how-gas-prices-are-determined
https://www.eia.gov/energyexplained/gasoline/factors-affecting-gasoline-prices.php
https://www.eia.gov/energyexplained/gasoline/price-fluctuations.php
https://www.forbes.com/sites/judeclemente/2018/06/27/the-link-between-crude-oil-and-gasoline-prices/?sh=73b0ecf37dbd
https://www.cnbc.com/2022/07/04/high-us-gas-prices-weigh-on-demand-with-impact-on-consumption.html
https://www.cnn.com/2021/06/23/politics/joe-biden-gas-price-fact-check/index.html https://www.theguardian.com/business/2022/jul/18/oil-price-rises-joe-biden-saudi-output-petrol-diesel-prices 
https://www.bbc.com/news/business-63855030
https://www.forbes.com/advisor/personal-finance/why-are-gas-prices-rising/
https://www.nytimes.com/2022/03/10/business/russia-ukraine-war-gas-prices.html