The U.S. Energy Information Administration states the Organization of the Petroleum Exporting Countries (OPEC) affects oil and gasoline prices in the United States by managing output of member countries, thereby increasing prices when production is decreased. A 10 cent rise in gas prices costs Americans an extra $11 billion per year in gas alone, according to ABC News.Continue Reading
OPEC members produce 40 percent of the world's crude oil and 60 percent of the total oil traded between countries. Saudi Arabia, the largest producer in OPEC, keeps between 1.5 million and two million barrels of oil per day to manage the oil market.
A 10 cent rise in the price of a gallon of gasoline means Americans spend an average of $93.25 more per year on gasoline. The average American household spends more than $3,300 per year on gasoline alone. Low-income families spend nearly 11 percent of their earned income on gas versus 6.8 percent for households in the highest income bracket.
Increases in gas prices affect profits of companies. The Atlantic reports that when gas prices go up, companies raise the prices of their goods to compensate for added shipping costs. When companies raise prices, consumers pay even more for rising gas prices than just the gas they put in their own cars. Groceries, appliances, feed, fertilizer and other consumer goods all go up in price when OPEC raises oil prices.Learn more about Law