Why does the price of gasoline sometimes rise so quickly?
This is partly economics and partly manipulation of the market. (Countless studies have been done that find gas companies don’t fix prices and aren’t in collusion with one another. I remain a sceptic.) The price of gas reflects two things: the price to replace the supply today and the process by which the companies manipulate prices on a local level. Oil prices fluctuate widely on the world markets, both up and down. Prices can spike sharply when there is any perceived threat to production levels, real or imagined, in response to international activities of various countries (e.g., the US-led invasion of Iraq), and in response to demand (e.g., a cold winter in northern nations, leading to increased fuel demands). Consumers do not appear to be charged the price of the oil at the time it was purchased – it takes several weeks for oil to travel from the oilfield to the gas station – but rather the weekly peak market price. It also seems that prices increase suddenly, but fall quite slowly
