Who Actually Controls Gas Prices?

Nobody single-handedly controls gas prices. They are set by global market forces—anchored by crude oil supply and demand—then shaped by OPEC+ production decisions, refining capacity and margins, taxes, distribution costs, retailer competition, and seasonal demand. Politicians and individual companies can nudge prices at the margin, but no one actor dictates what drivers pay at the pump.

How pump prices are built: the price stack

What you pay at the pump is the sum of several components. Understanding the relative weight of each helps explain why prices move—and who influences them.

• Crude oil: Typically the largest slice, often about 50–60% of the U.S. pump price, tied to global benchmarks like Brent and WTI.
• Refining: Converting crude to gasoline; margins can swing sharply based on capacity, outages, and seasonal fuel specifications.
• Distribution and retail: Transport, storage, station operating costs, and retailer margins; competition in a local area affects this share.
• Taxes: In the U.S., a federal tax of 18.4¢/gal plus state and local taxes (often 20–60¢/gal). In many European countries, taxes and duties can exceed half the final price.

Because crude oil is the dominant input, movements in global oil markets are the primary driver, but refining bottlenecks, local taxes, and retail competition can widen or narrow the gap between crude prices and the pump.

Who has real influence—and how

Multiple players have levers that can push prices up or down, but their power varies by time horizon and geography.

• OPEC+ (Saudi Arabia, Russia, and partners): Can lift or restrain global crude supply via production targets, influencing world oil prices.
• U.S. shale producers and other non-OPEC suppliers: Respond to price signals by increasing or cutting drilling; changes take months to materialize.
• National oil companies and oil majors: Allocate capital to new projects, maintenance, and refining; decisions shape medium-term supply and refining capacity.
• Refiners: Control runs, maintenance schedules, and seasonal blending; refinery outages or tight capacity can spike gasoline prices even if crude is steady.
• Commodity traders and futures markets: Set daily price expectations and manage risk; they discover prices but don’t “set” fundamentals.
• Governments: Affect prices via taxes, environmental rules, sanctions, and emergency stock releases; these influence costs and availability more than day-to-day pricing.
• Retailers: Compete on margin; they adjust pump prices based on wholesale costs, local competition, and brand strategy, but have limited sway over underlying costs.
• Consumers: Demand patterns—commutes, holiday travel—shift prices seasonally; sustained efficiency gains or EV adoption can temper demand over time.

In practice, crude suppliers and refiners shape the biggest cost components, while governments and retailers influence the add-ons that vary by country and neighborhood.

What moves prices in the short term vs. the long term

Different forces dominate at different time scales, from weekly swings to multi-year trends.

• Short term (days to weeks): Refinery outages, hurricanes, unplanned maintenance, seasonal fuel switchovers, and sudden geopolitical headlines.
• Medium term (months): OPEC+ policy shifts, shale drilling trends, inventory levels, and macroeconomic demand changes.
• Long term (years): Investment in oil projects and refineries, efficiency standards, EV adoption, carbon policies, and structural shifts in global demand.

Short-term shocks often fade as supply chains adjust, while investment cycles and policy choices set the baseline price environment over years.

Why prices climb fast and fall slowly

Drivers often notice the “rockets and feathers” pattern: prices rise quickly but decline more gradually. Several mechanics explain this.

• Inventory dynamics: Stations price replacement cost risk; they raise prices to cover the next load when wholesale costs jump.
• Contracting and lags: Wholesale and retail adjustments filter through with delays when prices are easing.
• Local competition: Stations under less competitive pressure may take longer to pass along declines.
• Refining margins: These can expand in tight markets and compress only after supply normalizes.

The result is asymmetry: spikes transmit rapidly to the pump, while relief typically arrives in stages.

Gasoline vs. natural gas: don’t mix them up

“Gas” can mean different fuels. Gasoline (petrol) and natural gas have distinct markets and price drivers.

• Gasoline: Derived from crude oil; tied to global oil prices, refining capacity, and fuel standards.
• Natural gas: Priced at regional hubs (e.g., Henry Hub in the U.S.); driven by weather, power demand, storage, production, LNG exports, and pipeline capacity.

Although both are energy commodities, the players, infrastructure, and pricing dynamics are separate, so one can rise while the other falls.

What governments can—and cannot—do

Officials have tools to influence prices, but their reach is limited compared with global market forces.

• Taxes and duties: Adjusting excise taxes or VAT can immediately change pump prices; effects vary by country.
• Strategic reserves: Releasing crude can ease tight markets temporarily; it doesn’t replace sustained production.
• Regulation and standards: Fuel specifications, emissions rules, and permitting affect costs and capacity over time.
• Sanctions and foreign policy: Can constrain supply from targeted producers, often lifting prices globally.
• Antitrust and market oversight: Enforcement can deter collusion and unfair practices in refining and retail.

These levers can moderate volatility or shift cost structures, but they cannot override the fundamental balance of global supply and demand for long.

How consumers and fleets can buffer costs

While individuals can’t set prices, they can reduce exposure to volatility.

• Shop around: Use pricing apps; local competition can save significant cents per gallon.
• Drive efficiently: Maintain tires, avoid aggressive acceleration, and reduce idling to improve MPG.
• Timing and planning: Combine trips and refuel midweek if local patterns favor lower prices.
• Vehicle choices: Higher-efficiency models or EVs reduce or eliminate gasoline spend over time.
• For fleets: Optimize routing, adopt telematics, hedge fuel, and diversify powertrains.

These steps don’t change market prices, but they lower the amount of exposure each driver or fleet has to price swings.

Bottom line

No single entity “controls” gas prices. They emerge from global crude markets, shaped by OPEC+ and other producers, transmitted through refineries and supply chains, and modified by taxes and retail competition. Governments can influence, not dictate; retailers set local margins, not global costs. Understanding the stack—and who affects each layer—clarifies why prices move the way they do.

Summary

Gas prices are primarily driven by crude oil supply and demand, with OPEC+ decisions, refining capacity, taxes, and local competition all playing roles. Short-term spikes often reflect refinery or geopolitical shocks; longer-term levels reflect investment cycles and policy. Neither politicians nor retailers control prices outright; they influence parts of the cost structure while global markets set the tone.

Can the government regulate gas prices?

U.S. presidents can’t control how much voters pay at the pump, but they can enact policies that encourage low fuel prices.

Which president ended the price controls on oil?

Additionally, as part of his administration’s efforts at deregulation, Carter proposed removing price controls that had been imposed by the Richard Nixon administration before the 1973 crisis. Carter agreed to remove price controls in phases. They were finally fully dismantled in 1981 under Reagan.

What actually determines gas prices?

What Determines Gas Prices? 10 Key Factors Explained

• #1 The Price of Oil. The gasoline we put in our cars is derived from crude oil.
• #2 Refining.
• #3 Taxes.
• #4 Distribution.
• #5 Marketing.
• #6 Gas Stations.
• #7 Supply.
• #8 Demand.

Why are gas prices so high right now in the USA?

Why are gas prices so high in the U.S.? The United States still boasts high gas prices historically as a result of infrastructural issues, experts say. “We’ve got fewer refineries than we had 20 years ago, and the ones we have are running at capacity.