why the high price of gas is it really necessary?

Answer 1

Yes it's necessary based on the current supply & demand situation. If supply was greater or demand lower, then it could be cheaper. The pricing mechanism is how a free society can efficiently allocate resources, including gasoline. If some authority forced gas stations to sell gasoline at an artificially cheap price, there'd be shortages. There would literally be empty gas pumps and long lines of people waiting at gas stations. People would fill up on cheap gasoline when it WAS available and suck the pumps dry. High prices serve as a signal of the current scarcity of gas and as a disincentive to waste it going on long unnecessary drives.

BTW, while the price of gas moves with the price of oil, gas is more expensive than it otherwise might be because refining capacity is limited (hence supply is limited even more so than the supply of oil would suggest). And the reason refining capacity is limited is government regulation and interference. The various levels of government make it nearly impossible to build a new gasoline refinery, so few if any have been built in recent years.

Answer 2

No, it's not "necessary" but why charge less when countries are stuffing cash into the OPEC countries pockets just to make sure they are getting their share of fossil fuel?
Face it, until the cost of alternative energies gets competitive with fossil fuel, the supply and demand curves will rule the price level. And it 's far easier to tighten supply than to curb the demand.

Answer 3

Well, gas is not a magical substance that appears in the pumps when you want to get it. It has to come from oil. Companies spend a lot of money to find the oil and extract it. The cost of finding the oil is quite a lot. The cost of extracting the oil is not cheap either. Also, remember that the cost of environmentally protecting where the oil is found hikes up the cost. You also have to pay for workers in all of this. Now you have to transport the oil. That is tough. One gallon of oil does not correspond to one gallon of gasoline. So you have to transport a lot of oil to make enough gas. You have to pay for the vehicles and pay to maintain them, pay workers to move the stuff, pay for insurance, and also buy fuel for the transport. Once again you have environmental costs to worry about. Ok, you have transported it. Now you have to process it. A processing plant is expensive to build, expensive to run, and expensive to maintain. Also, you have lots of workers to pay for as well. Once again, you have environmental costs to worry about. Ok, you process the oil. You get gasoline plus a few other products. That is lucky, the sale of the other products gives you a bit more money. Ok, now you have to get the gas to where you will store it. The storage costs money, plus the workers, plus the environment costs. Ok, now distribute it to the gas stations. You once again have to pay for transport, pay for drivers, pay for insurance, and pay for environmental costs. Now the gas stations have it. A gas station has to pay for overhead, labor, insurance, and all sorts of operating expenses. On top of that, you have all sorts of extra stuff like taxes, and dealing with lawsuits, and probably a million other expenses I did not cover. On top of that you have the organizational costs which deal with paying management and advertising and research and development.Also, all parties involved are not doing this work out of the kindness of their hearts. They want to make some money at it. Every one of these steps will increase the price of gas. Also, don't forget that there is a government tax on gas. That brings up the price some as well.

The profit margins of the gas companies are in line with the margins of other large companies. If they were not then the stock holders would put their money into the other companies instead. That would mean that the gas companies would not have the capital to work with. For the past few years there have been all sorts of allegations that the oil companies of hiking their prices for no reason, however, no court or congress or any investigation has been able to find proof of that. Gas prices go up because something in the costs of getting the gas to the consumer goes up. Oil could be harder to find, new environmental laws make the job more expensive, the cost of labor goes up, whatever. All of this will raise the price of gas.

Answer 4

It's really necessary if the point is for George Bush's buddies to make billions of dollars.

Answer 5

It is caused by the speculators on the futures market.

Answer 6

No it isn't and it is something that we can't change

Answer 7

no it isn't maybe they're just greedy