What Are The Causes Of Gas Prices

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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…show more content…
Gas Prices affected by Geopolitics and Supply problems Along with the demand for oil rising, many disruptions to the supply have created bottlenecks. For example, the war in Iraq has resulted in reducing oil production there, as has also happened in Nigeria due to rebel activity. The continuing nuclear weapons wrangle with Iran, the government increasing its control over industry in Russia, and the oil companies being nationalized in Venezuela has given rise to misgivings about future supplies.In recent years, refining crude oil in the US has also become more expensive, with experts citing two main reasons for this: congressional mandates resulting in shifting towards the production of more environmentally clean gasoline blends, and the oil refineries on the Gulf Coast being devastated by Hurricanes Katrina and Rita in the year 2005. In addition, the production of crude oil in America has also become costlier since the places that have been easiest to drill have largely gone dry.This means that oil companies have to go increasingly into offshore oil producing areas such as the Gulf of Mexico, which cost much more to drill in. With oil companies having to access harder to reach locations, which makes it costlier to produce oil, and simultaneously them being forced to reduce their

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