eli5: why the current price of gas is much higher than in 2008 when the price of brent barrel was quite higher?
In: 226
The price of all goods is determined by two, *and only two* things: supply and demand.
A higher cost of crude oil impacts the supply side of the analysis, making it more expensive to make the gasoline. But if enough people demand the product, then that can easily make up for the difference.
At the end of the day, if enough people are willing to buy gas at $5.00 instead of $4.00 (i.e. you don’t lose more than 1/5th of your sales by raising the price) then the price will be $5.
Another way to put it: Gas companies are gouging you and telling you that it’s because of supply chain issues, when they are really just trying to maximize profits.
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