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Why is it that gas is higher now than when it cost $147 a barrel?

In July 2008 the oil was $147 a barrel and where I live in KY the price of reg. gas was not as high as it is now. Why is that?

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  • Anonymous
    1 decade ago
    Favorite Answer

    Because the gas reserves (stored refined gasoline) is lower than then and the possibility of closing some of the refineries in the mississippi delta (affecting supply of gasoline) and the fact that speculators bid the wholesale price of gas higher. Combined this made gasoline prices higher even though the flood threat was not as bad as some thought is was going to be.

    The price per barrel you hear about is for oil that is unrefined. Now there is another price for refined wholesale gasoline which is more the one to watch as this is the one that really affects the end user price. So while the supply of oil may be fine and the price per barrel drop the wholesale price for gas may not if reserves are lower due to higher demand etc.

    Hopefully in the coming weeks the price will drop a bit giving everyone a wee break.

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