Even if Aristotle hadn't told us so, we'd have figured out that stories need a beginning, a middle, and an end. And the very fact that they do means that they're going to need a tense—a temporal frame in which the sequence of events unfolds (E.M. Forster's formula of "and then…and then…and then…").
Generally, that's going to mean you'll be writing your fiction in the past tense. You're going to be relating a story that started some time ago—eons, or just minutes—and that moves, through an escalating sequence of events, toward some conclusion. That's why "Once upon a time" has been around so long—it sets up nicely for a straightforward, linear narrative, at the same time in promises us a surprising journey.
But lately it's become fashionable to tell some stories in the present tense. "Jack goes to the counter and orders a bologna sandwich. He eats it outside. He wonders where bologna comes from." Frankly, I find most such present-tense stories to be about that gripping. The idea, of course, is that the story will have a "You are there!" quality, a spontaneous, realistic, unfolding-before-your-very-eyes feel. But of course it's not unfolding right right then and there—somebody wrote it and sent it to a publisher, and we all know that—so I find the pretense precious and vaguely annoying.
And although you wouldn't think it, using the present tense also has a way of putting the story at a slight remove.
While the past tense allows us to move forward, at any pace we like, toward a future which is, in fact, our present (does that track?), the present tense roots us in the here and now. It negates the past, eliminates all but the immediate future, and slows the pace of the narrative.
Screenplays are written in the present tense, always, but that's because we're not really meant to read them; they're a series of images and scenes and lines of dialogue designed to unspool before us while we sit passively in our seats munching our vastly overpriced popcorn. As literature, screenplays hardly count; they're more like a blueprint or a business plan.
Where present tense does come in handy is in things like technical or science writing. You don't want to tell us where the screw went, you want to tell us where it goes. And when you're writing, say, about the behavior of subatomic particles, you're writing under the assumption that the little buggers are acting the same way, right now, as they always have and that they'll go on doing it forever. The electron didn't spin around the nucleus; it spins around it. Some things, like your prose, we assume to be eternal.