In recent years, gasoline prices have soared to exponential levels reaching an average price of $4.34 in the United States and over 70% more than last year.
However, one controversy that has dogged Shell Plc is the hiked prices that the energy and petrochemical companies offer their gas at the pump. But why is shell gas so expensive? I embarked on a fact-finding mission about this, and this is what I discovered!
Why Is Shell Gas So Expensive?
1. Quality Of Shell Gas
Shell gas is, without a doubt, one of the high-quality gas you can find at the pump since it contains low benzene levels making it an ideal gas for your engine.
Thus, the global group of energy and petrochemical companies sells their gas at a higher price than other regular gases since it offers a return on investment.
Moreover, Shell gasoline stations are equipped with better fuel dispensing equipment, including underground tanks, fire-resistant pumps, and leak detection systems.
Installing and maintaining these safety features in all its fuel stations costs a lot of money, hence the hiked shell gas prices.
Nevertheless, you’re assured of your safety and good customer service whenever you buy fuel at Shell fuel stations.
2. High Cost Of Refining Shell Gas
Shell gas undergoes a thorough and intensive refining process to produce a premium product that the gas is.
The energy and petrochemical companies thoroughly refine their gas to lower its octane rating and enable it to burn cleaner and slower than other regular fuels.
Therefore, whenever you buy Shell gas, you’re assured of investing in environmentally clean fuel and saving your money in the long haul.
It’s worth noting that Shell Plc uses a significant amount of money to refine the gas it offers in its fuel pump stations.
That’s why the companies sell their gas at hiked prices to cover the gas refining costs they incur, earn a profit, and avoid losses.
3. Fuel Pump Location
Shell Plc has many fuel pump stations spread worldwide in over 70 countries that the global group of companies has set shop.
These Shell gasoline pump stations source their gas from nearby oil terminals and transport it via oil trucks.
Consequently, these oil trunks use gas to transport the Shell gas from oil terminals to fuel pump stations.
So, how far a shell fuel pump is to the nearby oil terminal directly impacts how much it will sell its gas to consumers.
For instance, Shell fuel pumps located in rural areas tend to sell their gas at higher prices than their urban counterparts.
4. Global Oil Prices
The global oil prices indicated by the Energy Information Administration (EIA) also directly impact the pricing of shell gas.
Shell Plc buys enormous amounts of unrefined oil from oil terminals, enabling them to offer competitive rates over independent stations.
Nonetheless, when global oil prices increase, they affect all levels of the oil market worldwide, including the retail price.
Additionally, when the global oil prices increase, the supply of the oil decreases while demand increases, making shell gas prices drastically increase.
That’s why shell gas is so expensive currently since the prices of oil and fossil fuels have increased worldwide.
5. Rental, Taxes, and Labor Bills
Shell Plc requires a considerable amount of space to set up its fuel stations and, thus, spends enormous sums of money on paying rental fees.
Gas stations around the world are also required to pay vast sums of money in taxes since they work in a thriving sector.
Besides, Shell Energy and Petrochemical Companies have over 80,000 employees who are compensated for their labor.
Hence, this group of energy and petrochemical companies sells their gas at hiked prices to account for the huge bills and stay afloat.
To learn more, you can also read our posts on why ambulances are so expensive, why La Mer is so expensive, and why AT&T is so expensive.
Shell gas is so expensive at the pump due to a combination of different factors directly affecting its pricing.
However, it’s essential to note that the gas compensates for its high price by protecting your engine and being safe and environmentally cleaner than other regular gases.