Just a random musing. As EV’s become more popular, means less gas being used, means potentially lower prices since supply of gas should increase? Or do they just cut production and keep prices the same.
Wondering what will happen in the long term.
Just a random musing. As EV’s become more popular, means less gas being used, means potentially lower prices since supply of gas should increase? Or do they just cut production and keep prices the same.
Wondering what will happen in the long term.
Definitely a lot of factors that will come in to play:
Less demand for gas puts downward pressure on price.
Gas stations have fewer customers. That means many will close. The ones that are open will need to charge a higher profit margin per gallon to stay in business (and will get it due to less competition). Fewer gas stations means that per gallon distribution costs will increase as it’s more expensive (per gallon) to distribute to 2 stations in a region then 10.
There are a lot of fixed costs and economies of scale in refining crude oil. With less gas being made, fixed cost per gallon will increase.
In long run, producers will reduce crude supply which will also keep price up.
My view is the net will be significant cost increase for a gallon of gas. Of the price paid, a higher percentage will go to the gas station, refinery; distributor; etc all due to higher relative costs per gallon.
Not to mention carbon taxes that may or may not materialize.