University of Minnesota - UMN Executive Leadership Insights
Why Gas Got So Expensive (It’s Not the War)
Video

Why Gas Got So Expensive (It’s Not the War)

Wendover Productions
Wendover Productions, 2022
Watch the video

Read or listen offline

Amazon Kindle
  • 0.5×
  • 0.75×
  • 1×
  • 1.25×
  • 1.5×
  • 1.75×
1×

Editorial Rating

9

Qualities

  • Analytical
  • Eye Opening
  • Engaging

Recommendation

If you live in the United States, you’ve likely heard people express rage at the current administration for rising gas prices, but you may also suspect that the world economy is a little more complicated than that. According to Sam Denby at Wendover Productions, the current surge in gas prices has little to do with politicians, and everything to do with a sudden (and profitable) switch in overall strategy for the oil and gas industry. High gas prices actually mark the swan song of a dying trade, an industry that’s scrambling to capitalize on the unwieldy transition as the world switches to renewables. 

Summary

The price of crude oil accounts for 59% of the price you pay for gas at the pump. Refinement, taxes and distribution also affect price. US politicians have minimal influence.

When the price of gas in the United States rises, people want answers, and all too often they end up blaming politicians – but political factors pale in comparison to the factor that has the largest influence on gas prices: the base price of crude oil, which accounts for 59% of the price you pay at the pump. Crude oil prices aren’t determined by US politicians, but rather by OPEC (The Organization of the Petroleum Exporting Countries). 

California has the highest gas prices in the United States, which makes the state a useful case study when trying to understand gas prices. While it’s true that California charges higher taxes for gas, taxes only account for about 11% of the price you’ll pay at the pump regardless of which state you’re in. Distribution and marketing are the next most influential factor for gas prices, accounting for about 12% of the total gas price. California’s geography makes it difficult to transport gas by rail or pipeline...

About the Speaker

Wendover Productions is an educational YouTube channel started by Sam Denby in 2010. The channel has over three million subscribers. Denby’s other channels include Extremities; Half as Interesting; and Sam from Wendover.

Comment on this summary