Gas prices are increasing at an alarming rate, but the reasons behind the hikes remain unclear.

Gas prices have been on the rise for years, but in recent months they’ve increased at an alarming rate. The price of gas was raised by 5.6% in October 2021 alone, according to BBC News. The jump from $1.85 per gallon to $2.05 is a big increase, and it’s one that doesn’t seem to have a clear cause.

The first thing to note is that there are two different kinds of gas prices: wholesale and retail. Wholesale gas prices are set by suppliers who buy gas from producers and then sell it on to retailers or consumers.

Retail gas prices are what people pay at the pump when they fill up their cars with gasoline or diesel fuel. These are set by individual retailers based on what they think people will be willing to pay for their products.

Why do wholesale gas prices keep going up?

“Why don’t you raise your own prices?”

Wholesale gas prices have been going up for several years now, but this year has seen some of the highest increases yet.

This year’s increases seem to be related to OPEC’s production cuts, which were implemented in early 2021 after Saudi Arabia realized that oil was being overproduced globally.

The price cuts worked well initially, but now Saudi Arabia has begun ramping up production again due to low demand and high stockpiles.

As a result of this overproduction and falling demand around the world, oil stockpiles have grown significantly.

Saudi Arabia is hoping that OPEC will meet soon so that they can begin discussing new production cuts again. If this happens, then we can expect wholesale gas prices to start dropping again.

If OPEC doesn’t agree on new production cuts though (or if Russia refuses), then we could see even higher wholesale costs next year.