What's the real reason why gas prices are so high?

Question

Don't tell me it's because of the war in Asia. Also please don't tell me it is because of some refinery fire. Am looking for some real reasons here.
Anybody can shed some light on what's going on?

Answer 1

You'll get a lot of stupid answers to this question (you already have a few), ranging from "it's a government conspiracy" to "ME terrorist are driving up oil/gas prices".

The fact that refineries have been out of full service has had *some* effect on the prices, but not much. The real reason oil and gas prices are high is due to fundamental supply and demand. Oil, despite what any idiot will tel you, is a finite, non-replenishable natural resource. We are simply used to having what we perceive as infinite supply, but the oil production peak is here (or will be very soon), and that is the primary cause for disruption.

Also, for your knowledge, oil and gas are traded on the open market, so market speculation has also had some effect on manipulating the pricing. People often say that OPEC is pushing the price higher, but it's really investors and hedge funds that control the speculation. Also, despite what you read or believe, an overwhelming supply of US oil comes from Canada and the US, not OPEC (although, of course, some does).

If you're looking for more on the forthcoming energy crisis check out www.peakoil.com.

Answer 2

Gasoline is more expensive for many reasons, but primarily because of the combination of strong demand, reduced supplies from refinery disruptions and lower imports.

Sure, it's easy to blame it on the oil companies or President Bush, and yes... oil companies have to make a profit too, but there is a lot more to it than that. I could go on forever on this topic, but I'll keep it brief.

Since Americans are driving more, the demand is at an all-time high, and Imports to the U.S. in the first quarter fell 12 percent (if I remember correctly) compared with the same period last year.

REFINERIES:
Although there haven't been any new refineries built since the 1970's, the industry has increased production through the expansion of existing refineries, adding the equivalent of a new large refinery every year for the past decade. Adjustments made during maintenance means refineries can now produce more gasoline (and diesel fuel) from the same barrel of oil. Since last year, America's refining capacity has expanded by more than 200,000 barrels per day (42 gallons per barrel). So, despite scheduled refinery maintenance and unplanned refinery outages, current U.S. gasoline and diesel production is at record levels. Still, it is not enough to keep up with the rising demand.

Efforts to cut refining and pipeline maintenance costs in order to reduce prices at the pump, also have an affect on safety and structural integrity, further hurting supply (for example: the pipeline corrosion at Prudhoe Bay, AK and the Texas City refinery explosion that killed 15 BP contractors, for example).

Also, every year during the month of May, refineries and terminals convert from winter RVP (Reid Vapor Pressure) gasoline to summer RVP, which is more expensive to produce. Refining capacity is reduced during this conversion. The conversion, however, is now complete, so you should see prices drop in the coming weeks.

Meanwhile, the shortages are real, not manufactured, although they are, in part, a symptom of a business culture that allowed for such shortages to occur.

Answer 3

What is it about the economic impact of refinery fires that you don't understand? Valero Petroleum is just coming back on stream from a refinery fire. The Conoco-Phillips refinery at Wood River Illinois, one of the biggest and most strategically located in the nation, is also still recovering from a major fire.

We have no excess refinery capacity in the U.S. because there hasn't been a new refinery built here in over 30 years, primarily because increasingly stringent OSHA and EPA regulations have made it economically impractical. At this point, the only ones who have stated willingness to build a refinery here are the Kuwaitis.

Exxon Mobil is buying back their own common stock rather than make risky new investments in the U.S. They see building a new refinery on mainland China as less risky than building one in the U.S. This is a prime example of how our restrictions have driven critical industries out of America.

Answer 4

there is extra effective than one answer. First remember that gasoline station vendors are franchise vendors, purely like Wendy's, Mc Donalds, etc. they might desire to purchase the gasoline they sell. Now, on an prolonged trip weekend they understand that they won't get a transport might desire to they run short. in case you have been a station proprietor might you close up down for an afternoon whilst the guy around the line grow to be nevertheless doing business enterprise? not fairly. upload to that the certainty that we now might desire to purchase "boutique gasoline" it fairly is, for the warmth climate months, gasoline must be re-formulated on the industry to distinctive areas of the country. it fairly is, the gasoline you purchase in say NYC, would be distinctive than the gasoline you purchase in say Kansas city, etc. Courtesy of the EPA. upload to this the certainty that we have got not been able to develop our refining means for the final thirty years, owing to the tree-huggers that usually threaten a lawsuit might desire to that concept arise everywhere, and you will see that the "evil" oil businesses are put in a actual squeeze to maintain up with grant and insist. As for those "obsene" earnings, understand that the oil businesses in basic terms get to maintain approximately 8 cents of each and every greenback they usher in. it fairly is via the fact they might desire to spend something on exploration and progression in different areas of the worldwide because of the fact they might't do it right here. and a great variety of those "obsene" earnings are made in different areas of the worldwide. Do you think of that the U.S. is the only usa that makes use of oil? i think of this is exciting which you do not care with regards to the extremely-severe expenses that another countries fee for gasoline. a great variety of that fee is via exorbitant taxes that are charged to gasoline. think of approximately that the subsequent time some liberal fool starts spouting off approximately unfastened wellbeing care. Yeah perfect. connect the dots.

Answer 5

Gas prices are high (by our standards) because we keep paying them. As long as we keep paying inflated prices, the oil companies will keep jacking them up. Our prices are low in comparison to other parts of the world.

Answer 6

There is no real reason.

It's Free Markets, 101... Gouge or be gouged.

What you're seeing is a veritable gouge-fest.

Answer 7

Because its an easy way for not only oil companies but independant station owners can get rich.

Answer 8

Money.

Answer 9

TO DISTRACT AWAY FROM REAL ISSUES!

Answer 10

I think GREED!!!