Gas prices directly affect our everyday expenses — from commuting to how much we pay for goods and services. But what causes fuel prices to change so often? Below are key elements that drive gas prices in the USA and Mexico and help explain the shifts we regularly see at the pump.
Gasoline is refined from crude oil, making its market price a major influence on fuel costs. Global supply and demand, international conflicts, severe weather, and OPEC's production decisions all play roles in moving crude oil prices. When oil becomes more expensive, that cost generally gets passed on to gas buyers.
Taxes are another major factor. Both Mexico and the United States apply gasoline taxes at the federal, state, and sometimes even local level. These tax rates differ across regions, leading to variations in gas prices from place to place. Shifts in tax laws can also lead to price changes over time.
Basic economics also affects fuel prices. When demand goes up — for instance, during holidays or big events — prices usually rise. If there are issues with supply, like a refinery shutdown or disruptions due to political instability, prices can spike. On the flip side, when supply increases or demand drops, prices often go down.
Local competition among gas stations can affect what you pay. In areas with many fuel providers, businesses may lower prices to attract more drivers. Brand presence, additional services like mini-marts, and reward programs can all factor into how stations set their prices. This explains why you might see a range of prices in the same city.
Currency exchange rates also play a role. Since oil is traded globally in U.S. dollars, shifts in the value of the dollar or the Mexican Peso can impact fuel import costs. A weaker local currency can make fuel more expensive, adding another layer of unpredictability to prices.
Being aware of what drives fuel prices — from oil markets to taxes and beyond — helps consumers and businesses stay prepared. Understanding these influences in both Mexico and the U.S. can lead to smarter choices when it comes to travel and budgeting for fuel expenses.
