You’ve probably seen local gas prices fluctuate, but it’s not always easy to tell whether you’re getting a fair price. What’s reasonable depends on supply and demand—and if you’re not familiar with the factors affecting both, you have no way to know what you should be paying. Luckily, the answer boils down to just a few of the factorsddd explained below. 

What Determines Local Gas Prices

1. Weather

The temperature in your area has a major influence on demand. If it’s especially cold, people will be buying gas for heat. If it’s hot, energy suppliers buy gas for power plants to meet the increased demand for electricity. At mild temperatures, demand is lower than at either extreme.

2. The Economy

The general state of the economy and the value of the dollar affects everything you can buy, including gas. While every product fluctuates separately, they all trend up or down together.

3. Price of Alternatives

Natural gas isn’t the only heating option available. Petroleum products are also a viable alternative for heating and electricity. When petroleum prices dip and buyers make the switch, demand for natural gas decreases.

4. Production

On the supply side of the equation, imports and production are the most obvious factors in play. The more gas is on the market, the lower the price will fall.

5. Storage

In addition to importing new gas, suppliers also consider their existing reserves. When companies have a full gas supply, they can sell their surplus for lower prices. On the other hand, low reserves will raise the average price.

By keeping an eye on these factors, you can predict pricing patterns and decide whether local gas prices are a good deal. By remembering the determinants of supply and demand, you’ll know exactly why suppliers choose the prices they do.

Superior Gas in Roanoke, AL, is the area’s top source for gas and propane. They’ve been a trusted supplier for almost 70 years, and they offer delivery and repairs to keep your home or business up and running. What’s more, they happy to compete with current, local gas prices. To arrange service, call (256) 396-2428 or send them a message online.