After an emergency, such as a hurricane or tornado, gas stations may raise gas prices to levels that are very high, unreasonable, and unfair. This is called price gouging and it is illegal. If you believe that you are a victim of price gouging, contact your state attorney general.
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Reasons for Changes in Gas Prices
Have you ever wondered why gas prices at your local gas station change over the months, or why the price of gas in your city is different from prices across the country? Several factors affect the price you pay at the pump for gas.
Crude Oil Prices
There is a limited supply of crude oil, the main ingredient for the gas that is used in cars. If demand for this oil increases or there is a shortage in the amount available (due to natural disasters or political unrest in the areas that produce the oil), then the price of fuel for your car may also increase.
Refineries and Transportation
After companies drill for crude oil, they refine it or put it through several chemical processes so that it can be turned into fuel for your car. The refined crude oil is then transported to each region of the country through pipelines and tanker trucks. The refining and transporting costs are passed on to you.
Many oil refineries are in the southern part of the U.S., near the Gulf of Mexico. Since it costs more to transport the fuel farther distances, the gas prices in the states that are farther away may be higher than the gas prices in states that are closer to the refineries.
In the late spring and summer months, there are more steps involved in the refining of the crude oil that makes it more expensive. The higher costs of refining often lead to higher gas prices, especially in the summer. Some states also require additional chemicals to be included in the fuel that is sold in their state, which also can add to the cost.
The price per gallon of gas includes taxes from federal, state, county and city governments. There can be differences in gas prices because of the state and local taxes.
In areas with few gas stations, gas prices tend to be more expensive than in areas with several stations nearby. Each gas station operator is responsible for paying rental costs, franchising fees, and staff salaries. Business costs can cause price differences between stations, even if they are near each other. If you participate in a station's loyalty program or cents off of the gallon promotions, that could help you save money on fuel. Some stations offer a discount if you pay with cash instead of a debit or credit card.
Find the lowest gas prices in your area, using Fueleconomy.gov's gas price tool.
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Hybrids, Plug-ins, All-Electric Cars, and Other Alternative-fuel Vehicles
Most vehicles rely solely on nonrenewable petroleum fuel, but there are a variety that don’t. If you’re considering buying a vehicle, learn about these other options:
When shopping for a vehicle, compare types and models for fuel usage, emissions and cost of ownership. Make sure to read the model’s fuel economy label.
The U.S. government offers tax incentives on the purchase of hybrids, plug-ins, and all-electric vehicles.
The number of alternative-fuel stations is increasing in the U.S., but before you buy, you may want to consider the availability of alternative-fueling stations in your area. When taking a trip, this fuel station locator map can help you plan your route.
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