Gasoline Problem

High desiel prices are a consequence of capitalism. As all fuel prices have been going up people are blaming the federal govenerment. They believe the president has influence of derterming the outcomes of tensions betwwen Israel and Iran. Some people blame incrased prices based on fears around the world. It all comes down to one thing to blame, capitalism. Calitalism can be great to an economic system because of its emphasis on efficienc and inbradible success rate at allowing those who control the means of production and resources to meet the demands of those with purchasing power. Capitalism is constantly evolveing and will impact the gap between current and future goals on oil prices.

Another cause for the decline in oil prices is caused by an increase in consumers purchasing more fuel efficient vehicles, such as hybrid or electric vehicles. In many countries today, especially in North America, there has been an increased demand for fuel efficient vehicles. This is evident in TV commercials which are advertising more and more vehicles that get 40 to 50 miles per gallon, and by the ever increasing commercials for electric vehicles. Consumers are tired of paying outrageous prices for oil and are demanding more for their money. As this demand continues to grow, the demand for oil will decrease.

The fluctuation of gas prices occurs because of a number of factors; the price of crude oil, the price of manufacturing, the price of corn is all tied to the price of oil and the price we see at the pump for gas.

High oil price for last few years drove the energy industry to come up with a new technological innovation and the result is a new drilling technique like hydraulic fracturing. This new technology made drilling easy in North Dakota and Texas (Timiraos, 2014). With more oil drilled domestically, U.S became net energy exporter instead of an importer. Also falling demand due to energy conservation, more efficient cars, less demand in China and OPEC opted against cutting production levels made the price go down. When Global economic growth was slowing and most economists agree that both supply and demand played role in the last year oil price plunge. Driven by the increased supply, oil price dropped from $82 to $50 between Oct'14 and Jan'15. The IMF summarizes 58% of the drop in oil price to supply and only 42% to demand.

The following article is regarding what is most important to everyone around us regarding the pricing for gasoline at the pumps. This is a topic that concerns most people on this planet, why are the prices for gasoline so high and is it regarding the greed of oil producing companies to continue to keep rising the gasoline prices as high as possible. We will discuss the many reasons why these fluctuating pricing keeps occurring within our world market. We will use the retail gasoline pricing between the

The American Petroleum Institute reports that 32.6 percent of the final cost to the consumer is the refiner's share that covers the cost of refining and provides the oil companies with their profit (Brodrick, 2000a). The government's share is greater, however. "Taxes account for 37.4 percent of gasoline costs and averaged 41.5 cents per gallon in 1999, according to the institute. The federal government's share is 18.4 cents, and the state takes about 23 cents. Occasionally, local municipalities tack on an extra tax" (Brodrick, 2000a; p. 000215b).

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The price of gasoline is definitely driven by the concept of supply and demand. When prices fall, quantity demand will rise, when price rises, quantity demanded will fall. This statement is true in most cases. But gasoline is a necessity to most Americans. The demand for fuel does not decrease when the price increase. Consumers often influence the price of gasoline. Gas prices in the late spring and summer months are the highest during the entire year. These are the periods when consumers drive the most. This is the time when most construction and manufacturing jobs are in operation. Like now, in the winter, gas prices are at the lowest point in a six month period. The six-month gasoline price chart I

The demand of gasoline has increased steadily over the last twenty years. In 1981 the U.S. averaged 6.5 million barrels of gasoline consumption per day. By comparison, in 2004 the U.S. averaged 9.2 million barrels of gasoline consumption per day. For most of this time period, gas prices stayed relatively the same. This is because the U.S. refineries increased their production to meet the demand and maintain the equilibrium price. Also during this same time period worldwide demand for crude oil increased 27%. Crude oil producers also increased their production to meet the demand keeping prices the same.

Gasoline continues to show an inferiority to diesel fuel in every category except for price, or so it seems. The average price of gasoline as of now is under two dollars for the first time in 6 years. (Energy, 2016) Gasoline usually is about 15-25 cents per gallon cheaper than diesel. For large trucks with a 30 gallon tank, this can be a large difference in price that naturally make people wary of purchasing a diesel vehicle. And with this natural disinclination towards diesel fuel, the world has shied away

If a retailer prices its gasoline too high, and without regard to competition, the retailer's customers may take their business to another station with lower prices. If a retailer loses enough volume, the retailer may then reduce prices in order to retain its customers. When more people are on the road, typically in the summer months or during holidays, the price will increase. Crude oil is the greatest contributing factor when it comes to the price of gasoline. The resources it takes to remove it from the ground, then transport it, and then refine it are the factors involved in pricing. The Organization of the Petroleum Exporting Countries has a big part in the price as well in both in the United States and around the world. Speculation of oil commodities can also affect the gasoline market. The second major factor that contributes to gasoline prices is refining. Oil refining is done by heating the oil with steam and only about 40 percent of what remains is gasoline. To produce more refineries must chemically change some of the other products that were produced. Distribution and marketing makes up the remaining 5%. The price of transporting crude oil to a refinery then gasoline to a point of distribution is passed on to the consumer. In addition the price to market the fuel brand is passed on to the consumer as well. Other factors affect gasoline prices such as extreme weather, war or natural disaster in areas where oil is produced can also in turn

Many people assume the reasons for high gas prices, but are unaware of the significant explanations. Most people would speculate the culprits for raising the gas prices are the oil refinery companies because their profit equals billions, but in reality our elevated dependency on gasoline, higher taxes, and environmental regulations are the

1 To illustrate, jet fuel is tied to the price of oil and, over the past year, oil prices surged from about $70 to $135 per barrel. Consequently, the price of jet fuel increased markedly, from an average of $1.77 per gallon to $4.20 by the mid-summer of 2008.

According to Domm (2013), the author of the first article, apart from the unrest in Egypt, several other factors such as a plunge in the inventories of domestic crude oil could drive up demand and in the end trigger an increase in the price of gas. In the opinion of the author, although the problems facing Egypt (and Libya) have affected supply

The US consumed 142 billion gallons of gasoline in 2007 and the tax applied on it is 18. 4 cents on one gallon. All around the US, there are around 162,000 retail gasoline outlets. With the price of crude oil hovering around $100 a barrel, it is no wonder that concern is growing about the gas prices being so high. After all, modern economies are kept moving by this lifeblood. For instance, in the United States alone personal vehicles consume more than 140 billion gallons of diesel fuel and gasoline per year.However, there are several factors that contribute to the gas prices being so high. Given below are a few of them. Increasing Demand for Oil One of the main catalysts for the incessant rise in gas prices has been one of the most