Factors Outside Gas Stations' Control Drive Fuel Price Spikes

Experts say retailers have little influence over the dizzying changes in US gas prices that are squeezing consumers

Apr. 2, 2026 at 2:35pm

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US gas prices have climbed rapidly, with the national average topping $4 per gallon as the Iran war shakes global oil markets. Experts say the frequent price fluctuations are largely outside the control of individual gas station owners, who are adjusting prices based on volatile wholesale fuel costs, taxes, and other expenses. While retailers may tweak prices to stay competitive, their profit margins are tight and they don't typically see large gains when prices rise.

Why it matters

The uncertainty and price volatility at the pump is frustrating for drivers, who are having to cut back on other expenses to afford the high fuel costs. Understanding the factors behind the price swings can help consumers better navigate the situation and put pressure on policymakers to address the underlying issues in the oil and gas supply chain.

The details

Roughly half the price at the pump pays for the cost of crude oil, the main ingredient in gasoline, with about 20% going to refiners. Taxes account for nearly 20% of the price, while retailers keep around 15 cents per gallon after expenses like transportation and labor. Prices can vary widely by location due to factors like taxes, distance from refineries, and competition between stations. While higher prices may benefit oil and gas companies upstream, retailers typically see their margins shrink when prices rise, as they struggle to pass along increases as quickly as they receive them.

  • On Tuesday, April 2, 2026, the national average gas price topped $4 per gallon, according to AAA.
  • Wholesale fuel prices, which shift multiple times a day, are the main reason one Minneapolis gas station owner said he's charging more than a month ago.

The players

Lonnie McQuirter

Director of operations at 36 Lyn Refuel Station in south Minneapolis, who said his margins have gotten much tighter due to rising wholesale fuel costs and other expenses.

Jeff Lenard

Vice president at the convenience store trade group NACS, who said retailers' markup has averaged about 38 cents a gallon over the past five years, with stations typically keeping around 15 cents per gallon after expenses.

Patrick De Haan

Head of petroleum analysis at GasBuddy, who compared gas station owners to homeowners in that they are "price takers, not makers" when it comes to fuel prices.

Garrett Golding

Assistant vice president for energy programs at the Federal Reserve Bank of Dallas, who said most profits in the oil and gas supply chain are made upstream by companies that extract and refine crude oil.

Neal Walters

A partner focused on energy at the global management consulting firm Kearney, who said gas stations near competitors may price gasoline competitively to attract drivers to their stores.

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What they’re saying

“We price based on what we're able to buy fuel at, and how well we can operate.”

— Lonnie McQuirter, Director of operations

“It really takes a toll when people are having to cut back on certain things in order to afford to live.”

— Lonnie McQuirter, Director of operations

“If I was selling a house today, I'd be beholden to whatever the housing market is. That's the same for gas station owners. Whatever the price of oil and gasoline are, they are a price taker, not maker.”

— Patrick De Haan, Head of petroleum analysis

“The margins shrink when prices go up because it's harder for them to pass along the increases as quickly as they themselves get them.”

— Patrick De Haan, Head of petroleum analysis

“It may be a good stretch of days or weeks for them, but they're also cautious of what it could portend.”

— Garrett Golding, Assistant vice president for energy programs

What’s next

Policymakers may need to examine ways to provide relief or stability for consumers facing the high fuel costs, such as temporary tax cuts or subsidies, while also addressing the underlying issues in the global oil and gas supply chain.

The takeaway

The frequent and dizzying changes in US gas prices are largely outside the control of individual gas station owners, who are simply passing along the volatile wholesale costs and other expenses they face. Understanding these dynamics can help consumers better navigate the situation and put pressure on policymakers to find solutions that address the root causes of the price spikes.