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Why Gas Prices Are Finally About to Come Down | Personal Finance

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How lower oil prices result in cheaper gas prices

The U.S. Energy Information Administration (EIA) says that the retail price of gas is comprised of four main factors: crude oil costs, oil refining costs, distribution and marketing costs, and taxes. Of the price you pay at the pump, the EIA says as much as 56% goes toward the wholesale cost of crude oil.

In other words, when crude oil prices drop, so do gas prices for everyday drivers — albeit with some lag time.

To combat the surging gas prices, President Biden ordered a release of 50 million barrels of crude oil from U.S. stockpiles ahead of Thanksgiving, but experts are attributing the tumbling oil prices largely to the Omicron variant — and not the president’s recent actions.

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