ENERGY - 5 Things That Actually Determine the Price of Gasoline -

Americans own cars—there are some 240 million of them on the road.
1.Global SUPPLY  and DEMAND - Gasoline prices are tied to oil prices, and oil consumption is booming, especially in places like China, India, and Brazil. As the commodity grows scarcer on a global level, prices rise. Japan, for example, is replacing some of its nuclear energy with oil.  IEA forecasts oil consumption to rise 830k this year after a 740k bpd increase last year. The unusually cold European winter is also thought to be boosting demand.
2.INSTABILITY in oil-producing regions. Much of the world’s oil comes from nations in more volatile parts of the world. When the market perceives a risk that political instability, diplomatic tensions, or regional violence might cut off the flow of oil, it reacts. That’s why we saw prices spike after tensions escalated with Iran. Iranian confrontation and its response (to cut sales to the UK and France) has also taken supply out of the market.  Civil wars or political uprisings can have similar effects. “Between Sudan, Yemen and Syria, nearly 750k barrels per day (bpd) have been taken out of production due to political instability,” Libyan oil output is about 600k bpd below pre-civil war levels. Political volatility racks many of the world’s largest oil exporters—Nigeria, Venezuela, Libya, Iran, Iraq, Sudan, etc— plays a very real factor in influencing both global supply and the risk premium of the oil coming out of the region. Bankers who trade in oil futures will make bets that such volatility will increase the cost of oil, and they can raise the cost of the commodity as a result.
3.FINANCIAL speculation - Financial speculators gamble on the oil futures market, effectively spurring the market price to rise and fall apart from the laws of supply and demand. Experts assert that net impact has typically been the overinflation of the price of oil. 'Excessive speculation is causing oil prices to spike by up to 40%'
4.DOMESTIC ENERGY policies -  there’s very little that a government can do to reduce the price of oil on the market. Governments can, of course, make gasoline cheaper by subsidizing its sale (nations like Venezuela do this in extreme measures to provide citizens with dirt cheap gas). They can make it more expensive by taxing it. High gas taxes can have the longterm effect of buffering citizens from oil shocks— transportation planning evolves to accommodate higher petroleum costs, the market incentivizes more efficient cars, and folks aren’t as vulnerable when gas prices rise. In the United States, the gas tax is extremely low—it’s the lowest in the industrialized world. As such, citizens here remain quite vulnerable to the whims of the forces described above.
5.Seasonal factors - seasonal conditions can influence the price of gas. Gasoline typically gets around $0.20-0.50 more expensive in the summer for instance, because, refiners stop blending gasoline with cheap butane and swap in more expensive ingredients that don’t evaporate as easily in the heat.
The president can tap the strategic reserve - he can lean on OPEC to release more oil supply into the market. He can approve the aforementioned drilling measures that would trickle into the market years down the road, but that wouldn't impact today's gas prices. Extracting, transporting, and burning gasoline creates all kinds of externalities that we pay for elsewhere—in health costs at the hospital, in wear and tear in roads, in environmental cleanup after disasters like the BP spill, and for the pollution that impacts society at large. Gasoline should be up to $11 more expensive because of these unaccounted-for costs.
http://www.treehugger.com/fossil-fuels/what-actually-determines-cost-gasoline.html