Gas prices seem to rise quickly, but lower slowly. This is called a “rockets and feathers" effect, where retail prices rise quickly but fall slowly, often taking weeks to catch up to lower wholesale costs.

Current high prices are driven by intense supply chain volatility linked to Mideast tensions, high seasonal demand, and retailers trying to recover the cost of inventory bought when prices were higher. Gas stations often set prices based on what it will cost to replace their inventory, not what they paid for it. If they expect higher costs tomorrow, they keep prices high today. Retailers quickly pass on higher costs (rockets), but are slow to lower prices when crude drops (feathers), allowing them to recover margins.

Gasoline takes time to travel from refineries to storage to the station. The fuel currently filling tanks was often purchased when crude prices were still elevated. Will gas prices eventually go down? Yes, once the summer demand reduces, and Middle East tensions ease. Relief may not come immediately, as analysts suggest high prices could persist until late 2026 or into 2027, depending on how quickly refining capacity increases, and how the geopolitical situation stabilizes.

Happy Motoring.