Why Gas Is Still So Expensive — Where the Money Actually Goes
Written by
Kerra Bolton
Edited by
Rebekah Evans
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Gas prices are lower than last year’s highs, but they’ve been creeping up again in recent weeks.
AAA data shows the national average for regular gas has risen since last month, reversing some of the relief drivers saw earlier this winter. Even modest increases can add up quickly for households that rely on daily driving.
Here’s why gas is still so expensive and where the money actually goes.
Where the Money Actually Goes
When drivers pay at the pump, only part of the cost reflects crude oil prices. According to the U.S. Energy Information Administration (EIA), a significant portion covers refining oil into gasoline, moving fuel from refineries to distribution centers and the day-to-day operation of service stations.
State and federal taxes also add to the retail price. Since some of these costs do not move up and down as quickly as crude oil, pump prices often remain high even after oil prices dip.
Refinery capacity can also be a pressure point. Planned maintenance or limited processing ability can reduce supply, which contributes to higher prices at the pump over the short term.
What Could Push Gas Prices Higher
Gas prices tend to rise when demand increases faster than supply can adjust.
Seasonal travel, refinery maintenance schedules and regional supply constraints can all tighten the market, even if crude oil prices remain relatively stable. Weather disruptions and unexpected outages can also reduce available fuel in the short term.
Since refining and distribution operate on tight margins, small disruptions can ripple through the system quickly. That means prices at the pump may respond to temporary pressures, even when broader economic signals suggest fuel costs should be easing.
What This Means for Monthly Budgets
For households that rely on regular driving, even small changes in gas prices can quietly strain monthly budgets.
A 10 to 20 cent increase per gallon (per GasBuddy), reflected in recent national pricing trends, may not stand out on a single fill-up, but over the course of a month it can translate into noticeably higher fuel spending. Drivers with long commutes, multiple vehicles or limited alternatives to driving often feel the impact most.
Gas is a recurring expense, which means higher prices can reduce flexibility elsewhere in the budget. When fuel costs rise, households may have less discretionary income available for groceries, dining or savings, making price fluctuations at the pump feel more disruptive than the per-gallon number alone suggests.
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