With gas prices rising and falling like stocks, it’s important to know how to improve your gas mileage. Maybe you can ride your bike every now and again to save your money on gas. You won’t have to use your car as much and it’s a great workout to get to and from different places like your local grocery store or restaurant not too far away. You never know if the price of a barrel can go up in a flash because it’s truly a volatile market. Here are some ways to help you improve gas mileage by finding out what determines gas prices.
What is Crude Oil?
Crude oil is unrefined petroleum that normally comes from the middle east, West Africa, South America, and other places. It’s a resource that’s used in our everyday gas. The importance of knowing about crude oil is that it represents 70% of the cost of a gallon of gas. This is an element traded on the open market and it can fluctuate at a moment’s notice. This is one of the primary reasons why you have either a jump or fall in price when it comes to purchasing your gas at a station. Two main factors can cause a change in price: supply and demand, or global unrest. If you notice any changes in these two factors, chances are the price will go either way.
Taxes Also Contribute to the Price
Of course, you’ll have to pay taxes with just about anything you purchase especially in the United States; there’s no way around it. On a nationwide basis, it’s around 13% for the total cost. However, depending on your state, taxes do change based on jurisdiction. For example, you have a state and local tax on your gasoline. Some can go as far as having a county or a city tax on things. It’s just like going to your grocery store these days and getting a small tax or fee for getting grocery bags to hold your items. It’s all dependent on your state, the city, and the county government. You can check the current mandates to find out how things are factored.
Refining the Oil and Marketing the Gasoline
Of course, crude oil is the raw element of your gasoline. Just like how sugarcane is made into sugar from the plant, this is a bit of the same way. Refining your crude oil and actually making it into a full-fledged fuel is about 11% of the cost you pay for your gasoline. Additionally, you have to market this gasoline to different distributors and stations. That’s another added fee of about 9%. With this knowledge, you can better guess how you can save money on your gasoline. Sometimes you don’t have to use your car to go to certain places, or you can stock up on your own gasoline instead of going to the local gas station every time. It all depends on what you want to make things easier.