from Wealth Cycles
Somewhere around October 5, gas prices in California spiked overnight, with prices going up by 30 cents to 45 cents throughout the state. The immediate question on the minds of most California drivers was, why?
In fact, this is a question that is asked often in California, as the volatility of gas prices causes a range of emotions, from anxiety and anger to aggravation and annoyance. Because rising gas prices can have such a profound effect both on household finances and economic prosperity, let’s take a look at the various factors that can and have caused the price of gas to fluctuate so drastically.
The most obvious factors are the supply and demand of both gasoline and dollars. As reported by Bloomberg earlier this month, an interruption in gasoline supply from refineries led directly to reduced availability to retailers.