Gasoline and diesel are the fuels most widely used by private consumers, businesses, and companies. For many organizations, they represent a significant fixed cost in their daily operations. Therefore, understanding what the factors that affect gas prices is essential for planning costs and making better decisions.
Although both come from petroleum, their refining process, the additives used, and the tax burden differ.
Factors that affect gas prices
As you probably already know, the prices of both fuels are not fixed. They vary depending on a number of factors that both companies and individuals should be aware of. It is these factors that cause the price of gasoline or diesel to rise or fall.
1. The cost of crude oil
Oil accounts for approximately 36% of the final price of gasoline or diesel. According to the U.S. Energy Information Administration (EIA), the price of crude oil is one of the main determinants of fuel costs, as it responds to variables such as:
- Global demand and future consumption projections.
- Geopolitical tensions in producing countries.
- The availability of strategic reserves and refining capacity.
In importing countries, such as Puerto Rico, the price tends to be higher due to acquisition and transportation costs.
2. Tax burden
Taxes are another determining factor. In Puerto Rico, for example, excise duty accounts for 11% of the price of diesel and 27% of the price of gasoline.
3. Distribution costs and margins
Distribution costs and profit margins include:
- Transportation costs to gas stations.
- Operating costs of these stations.
- Maintenance of strategic fuel reserves.
4. External and uncontrollable factors
There are elements beyond the control of companies and consumers, including:
- The volatility of the international market has increased following the pandemic due to changes in demand.
- Geopolitical instability often has an immediate impact on crude oil prices.
- Fluctuations in the dollar against other currencies, as it is the reference currency in the oil markets.
Tips for controlling factors that affect gas prices
At American Petroleum, we offer competitive options for fuel supply and distribution, backed by efficient and reliable service. In addition, we provide our customers with tools to help optimize costs. Some practical tips include:
- Planning routes and trips for transportation companies.
- Turning off engines during prolonged stops.
- Perform regular maintenance on vehicles and machinery.
- Use the American Petroleum Fleet Card to manage and control fuel expenses.
- Rent a portable fuel station from American Petroleum to increase operational efficiency at business facilities.
Controlling fuel prices is crucial, especially for companies with high gasoline or diesel consumption. With American Petroleum, you have a strategic ally to ensure the most competitive gasoline and diesel supply on the market.
Frequently asked questions about gasoline and diesel prices
Why does the price of gasoline vary so frequently?
Because it depends on international factors (such as crude oil prices and the geopolitical situation) and local factors (taxes and distribution costs).
How do taxes influence prices in Puerto Rico?
They have come to represent up to 60% of the final price, making them one of the most decisive elements in the cost structure. Currently, for Puerto Rico, they account for around 10% in the case of diesel and around 30% in the case of gasoline.
How much do transportation costs account for?
Although this data cannot be stated with certainty, it is estimated to be between 10% and 20%, considering transportation costs, station operations, and strategic reserve maintenance.
Sources:
- “Gasoline Explained: Factors Affecting Gasoline Prices.” U.S. Energy Information Administration (EIA), 2023. https://www.eia.gov/energyexplained/gasoline/factors-affecting-gasoline-prices.php
- “Taxes on Motor Fuels.” U.S. Department of Energy / Federal Highway Administration, 2023. https://www.fhwa.dot.gov/policyinformation/statistics/2021/mf205.cfm
- “OPEC Annual Statistical Bulletin.” Organization of the Petroleum Exporting Countries (OPEC), 2023. https://www.opec.org/opec_web/en/publications/202.htm