Consumer Resource Center

Understanding Fuel Prices

From the Refinery to the Pump

Have you ever wondered why gasoline and diesel prices change? The price you pay at the pump is influenced by several factors, many of which occur long before fuel reaches your local gas station/convenience store.

The Indiana Food & Fuel Association (IFFA) created this resource to help consumers better understand how fuel gets from the refinery to the pump, what determines fuel prices, and why those prices can change.

The Four Main Components of Fuel Prices

The price you pay at the pump is made up of four main components:

How Fuel Gets to Your Local Gas Station/Convenience Store

Fuel moves through several stages before reaching the pump, each involving transportation, equipment, people and operating costs.

Why Do Gas Prices Change?

Fuel prices can change due to many factors, including:

	Supply and Demand Global and local demand, as well as the availability of crude oil and refined fuel, can affect prices.
	Seasonal Requirements Different fuel blends are needed for summer and winter, which can impact costs.
	Market Conditions Changes in crude oil prices, refining costs, transportation costs and other market factors can influence pump prices.
	Taxes Federal and state fuel taxes are one component of the price at the pump.
	Local Factors Nearby stations may charge different prices based on when they purchased fuel, operating costs and competition in their local market.