We all know gas prices are going up. Who can tell us exactly why?

Answer 1

-They are not going up. When you adjust for inflation you'll find that gas prices were more expensive in 1981.

-Saying gas prices have gone up is like saying Rush Hour 2 made more money than gone with the wind.

-The reason people think their going up is because the gas prices are all up in your face.

Answer 2

Supply and demand.

However, I also believe that there is a lack of competition in the oil industry due to the giant mergers of the last couple of decades reducing the number of oil companies that refine oil. There is allegedly a shortage of refining capability, putting a limit on supply. Demand keeps going up, so the price goes up. However, there is no incentive for the oil companies to build any new refineries to increase supply because the cost of building a new refinery is huge and if the oil companies increase supply it will only reduce the price and either render building the new refineries a loss or at best a break even expense. So, since they are now making record profits every year, why would they change?

Answer 3

Because people are dumb enough to keep buying huge SUVs in countries which need cars, and buying cars in countries which have good public transportation which makes cars unnecessary. When the status-obsessed people of the various nations finally wise up and learn good old fashioned thriftiness, the demand for gasoline will go down and along with it, the prices. I predict that people will wise up about the same time that pigs sprout wings and learn to fly.

Answer 4

It's fairly simple. The United States does not have enough refineries to meet the demand and has to buy gasoline on the world market to make up the difference. Other nations are bidding on this same gasoline supply so in higher demand times this drives the prices up that we have to pay for imported gasoline.

Answer 5

Gas prices have increased for several reasons and there are many factors that contribute to the price of gasoline. As a fuel supply professional, I could write a book, but I'll spare you and get straight to the most direct question of "why are gas prices so high?"

Here are the main contributing factors:
1) A rise in crude oil prices (globally) beginning earlier this year, due in part to escalating geopolitical tensions in Iran, Venezuela and Nigeria.

2) Increased world demand for crude oil, with world demand rising by 1.2 percent to 86.1 million barrels per day according to the U.S. Energy Information Administration (EIA).

3) Record-high first quarter U.S. gasoline demand of 380 million gallons per day, up 1.9 percent over the first quarter of 2006 according to EIA.

4) Some refinery operations have been curtailed due to regularly scheduled refinery maintenance to enhance safety and upgrade equipment, as well as several unexpected problems caused by severe weather, external power outages, and other incidents.

5) A dramatic drop in gasoline imports that has pushed U.S. gasoline inventories to historically low levels due to spring refinery maintenance in Europe and an 18-day French port workers’ strike in March that led some European refiners to reduce production

6) The annual U.S. switchover to summer-blend gasoline, required by EPA, resulting in a large inventory drawdown, increased costs and lowered yields per barrel of oil.

The difference between summer & winter blend is the RVP (Reid Vapor Pressure). The summer-blend has a lower RVP of usually 7.8 or 7.4 lbs. The winter-blend is typically 9+ lbs. THe switchover from summer to winter blend is already completed across the U.S.

In order to make sure we do not run the country out of physical supply of gasoline, part of my job is to control how much fuel is available. Every fuel company does this. Each time a jobber, dealer, reseller, etc. (gas station, basically) needs gasoline, they are pulling it from an "account" and/or from a channel of trade. There are limits on how much fuel can be pulled from an account . Sometimes the limits are daily, sometimes they're weekly, or monthly.

When a gas station sets their prices too low, they'll sell more gas than they bargained for. Then they have to get more from their account allocation. Once they've used up all the fuel they're allocated -- even if there is fuel available at the terminal, they cannot get anymore because doing could put everybody else out of gas by running the terminal out of product. The allocation is dictated by the forecasted sales volume at the particular gas station, and how much supply is available.

So there's a short lesson for you about the supply & demand of gasoline in America.

Answer 6

Increased demand=reduced supply
Concerns in the Middle East
Reduced production
The buying power of the dollar

Answer 7

Supply and demand. It's a very simple concept to those who have taken the time to learn basic economics.

Answer 8

#1:Increased demand due to millions of illegal immigrants using it.#2:Waste by people driving around alone In gas guzzling SUV'S just because they can afford to!

Answer 9

Here we go with the conspiracy theories. People will say everything from Halliburton to Bush as being responsible. Let's see if anybody actually says the correct answer.

Answer 10

there are over 500 million chinese and indians, whose economy is booming and who are buying cars, thereby competing for our precious oil supply.