Real reason for the rise in gas prices in America?

Question

What is the real reason? Is it a foreign or domestic issue, or both? Does it have to do with taxes or foreign policy issues? If anyone knows of the major issues that have lead to the surge in gasoline prices in America, I'd appreciate knowing them. Some people blame Bush and the Iraq War, others say that it has nothing to do with it. Some blame OPEC, others blame American politicians. What is the answer?

I'm talking about the last 3-4 years, not this past season. When I first started driving about 5 years ago, gas was around $1.30 a gallon around here. Now it's at $2.80. That's over a 100% increase.

Does anyone believe that it has to do with our tensions in the Middle East and OPEC being an almost exclusively middle eastern organization?

Answer 1

The primary reason for the rise in the price of gas is the rise in the price of crude, which in turn has been brought on by increased demand. While the supply of crude has increased recently, it hasn't increased nearly as much as the demand has. There's more of us, and we're driving more often. While the US demand has increased, it's the increase in demand in China and India that has really caused the crude price increase. There's a LOT of people in China and India driving vehicles that twenty years ago would be walking or riding bikes. Certainly they have just as much a right to the oil as Americans do, but that's the reason for the price increase.

Answer 2

I don't really know the numbers, but certain little tidbits here and there lead me to believe that high gas prices are due to taxes and politics. Of course, it could be the oil companies exploiting an opportunity (such as the recent Iran hostage crisis) to make more profit, but I doubt that's it -- imagine what would happen if word ever got out! Gas pumps have little stickers on them that tell you how much of the cost is going to pay taxes -- here in Utah, anyway, it's something like 46 cents per gallon, which is a good 20% of the cost. (Imagine paying income taxes at that rate. Ugh.) But then there are the costs that they don't tell you about: the individual stations have to keep themselves running, so they charge some profit (which I'm just fine with, for the record); there are also subsidies to the oil companies from the government, to which yet more of the cost per gallon are siphoned (and I'm not OK with that for any business -- if you can't keep your own business up, why should I have to prop it up?). There are probably a whole bunch of other things in there I'm missing, but if my guess is right, only about a third of the cost per gallon at today's rates actually goes to the oil companies, maybe even less.

Answer 3

China and India, the most populous countries on the planet, have industrialized. This means that they are now consuming petroleum products at nearly the same levels as Americans & Europeans. OPEC did increase how much oil they're pulling out of the ground, but the additional costs of higher production, along with the higher costs due to larger global demand, has raised the oil prices. Even if we killed the gas taxes (which are higher, per gallon, than the profits per gallon that the oil companies make), we are done with the days of less than $2 per gallon. They are never going to come back again. Period.

Plus, we are at the start of the summer travel season. Gas prices always rise a little higher at this time of year to cope with the higher demand.

Answer 4

The first reason is supply and demand. Demand is always increasing, and the ability to increase supply is diminishing. The next reason is that energy companies are all spending huge sums of money on research and development in green energy technologies. They pass those costs on to all of us. Also, they seem to be insistent on posting record profits each and every quarter for some reason, probably just greed, so that raises the price as well. American politicians are guilty of being the lapdogs of western oil companies, and there are plenty of wealthy people in the opec nations who fund terrorism because they feel their resources have been exploited, but blaming either of those groups would fail to get at the source of the problem.

Answer 5

There are several reasons for for the rise in gas prices. First is that oil is a commodity traded on the open market. This market is speculative and deals with the future. The events in the Mid-East drive the speculation as well as domestic issues such as hurricane season. Next, we have a limited number of refineries in this country. Gas is also a commodity that is traded on the market. Loss of production at one refinery will cause a problem with supply. The loss of supply will generally increase the price. You must also look at the season. Winter and summer require different blends of gas. It takes time to retool for these blends which creates a decline in production, thus increasing the price. Taxes also play a role in the price fluctuation

Answer 6

The two biggest reasons are lack of domestic exploration and lack of refineries. The far-left environmentalists have no room for compromise. Thus, the legal battles involved are too expensive and not worth the trouble. China is working with Cuba now and sucking oil out of the Gulf of Mexico right under our noses cause we are not allowed to drill there! No one wants refineries or nuclear plants built or coal mined either. This will change only when gas hits about 5 or 6 dollars a gallon I believe. Then the silent majority will speak out over the vocal minority.

Answer 7

The main reason we are vulnerable to fluctuations is because we are very dependent on imported oil. If we drilled in ANWR we would be less susceptible to these spikes.

Some of it has to do with seasonal refining change over. Some of it has to do with OPEC and conflicts around the world. But a good deal of it could be negated if we were allowed to tap into our domestic resources. If you really want to blame politicians blame the Democrats. They won't let us drill where the oil is out of some blind love for what is essentially a barren waste land.

Answer 8

You have been given a number of answers. None of which touch on reality.
The short term fluctuations you see is supply and demand issues plus speculation on the effects of war in the middle-east.
The steady, long term cause is government deficit spending. Since 1971, the US dollar has been supported by demand of the currency on the international currency market. 65% of the trade on the international commodities market is done in US currency. When a country needs to buy oil from OPEC, it must first buy US dollars with its own currency. This trade is done on the currency market.
There is about $27 to $30 trillion US dollars in the global currency market. Since 2003, about $9 trillion was put into circulation because of government deficit spending. That $9 trillion was worthless money, which diluted the money in circulation generated by the US economy.
In this case, the US government increase the supply of currency beyond the demand for the currency. The result is increased cost of imports, like oil. Government deficit spending accounts for about 65 cents of the increase in gasoline since 2003. The rest of the increase can be attributed to pressure place on supply by the ongoing war.
Both causes trace back to the government.

Answer 9

The real reason for rise of gas prices....greed.
They (you pick whomever you want to fill "they") manufactured an oil 'shortage' in the 70's as an excuse to raise the price of gasoline. It is now clear that this action was only a marketing test. We now know that Americans will pay what is on the pump to get that shot of energy.
It is simple greed. There is no shortage of oil and will be none for at least the next 500 years. There is enough oil within the contintal U.S. to fuel us for that 500 years, plus what is in the rest of the planet.
If you really want to know who is behind it, just follow the money. It will lead you straight to the perpetrator(s) of these ridiculously high prices.

Answer 10

its mother F'N wall street...here is an example
uhh today it has been reported that fear of bigfoot
has spiked oil prices.
I heard about a story last year of 1 wall street firm dealing with oil futures
handed out 16 billion in bonuses , and notice yet again as summer comes around the prices are quickly rising again
but its more important for us to concentrate who madonna is tounging, or what brittany is doing with her coochie