If you've paid any attention to legacy media over the last two months, you've no doubt seen and heard plenty of freaking out over gas prices. The average per gallon has risen by about a dollar since the start of the Iran War, although it remains well below the record highs reached in 2022, and has even begun declining in the last two weeks (this week the Texas average fell by 14 cents and the national average dropped by six cents, according to AAA.)
While the war has definitely contributed to higher global oil prices and, in turn, rising domestic gas prices, it is hardly the only factor. In fact, boiling down gas prices to easy scapegoats like war, greed, or "Big Oil" is misleading. Lauren Fix, automotive journalist known as the Car Coach, explains in a new op-ed that gas prices are driven by several complex factors, many of which are out of the control of gas stations or oil companies. As Fix writes, "Gas prices aren't confusing by accident; they're confusing by design...the system is built so you don't ask too many questions."
First of all, Fix points out that gas stations operate on very small margins when it comes to gasoline, and actually rely on their convenience stores to make most of their profit. Second, many regulatory factors are at play long before the gas station even comes into play. "Certain states require specialized fuel blends that cost more to produce before they ever reach the pump," says Fix in her latest commentary. "Add in limited pipeline access, transportation costs, and distance from refineries, and you start to see why some parts of the country pay more and some pay less."
Probably the most overlooked aspect of gas prices is one that is not based on market factors at all---taxes. "On average, taxes account for roughly 10 to 20 percent of what you pay at the pump, and they don't go away when prices spike," says Fix. "So when prices climb, you're not just paying more for fuel, you're paying more in taxes on top of that...and yet somehow, that part of the conversation rarely makes any headlines."
"Instead, the focus stays on oil companies and gas stations because they're easy targets," she continues. "It's a lot simpler to point at a brand on a sign than to explain global supply chains, regional infrastructure limits, and layered tax policies...but those are the factors actually driving the number at the pump."
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