Why has the price of gas risen so high?

Question

Is it the oil companies? Is it the turmoil in the middle east? Is it the fact that there isn't much oil left on the planet? Is it a global conspiracy? Please include links that support your answer

Answer 1

ITS THE WAR IN IRAQ!!!


=]]

Answer 2

"Is it the oil companies?"

No, since oil companies don't have much control over the price of gas. Gas and oil prices are usually controlled by countries or a coalition of countries.



"Is it the turmoil in the middle east?"

No, since most of the oil produced don't come from the Middle East. The entire Middle East can be destroyed and most of the oil production would still be unaffected.



"Is it the fact that there isn't much oil left on the planet?"

No, since if it did, then everybody's cars would have runned out of gas by now. On the other hand, the argument 'there isn't much oil left on the planet' can be use as an excuse to raise gas prices and fund alternative energy research.

A researcher can be easily bought to prove that there's not much oil (like in the planet) or there's plenty of oil (like in the Middle East).



"Is it a global conspiracy?"

If one said yes even if it was true, will you believe it?

Nevertheless, it's a reality that there are a lot parties involved on controlling gas price, whether to raise it or to lower it. Market makers, researchers, distributors, and so on.

All of them, might have a common boss/manager.



Anyway. With all the expense needed to research, extract, refine, distribute, and so on to oil, one should ask, why is the price of gas is so low?

Answer 3

We've pretty much peaked when it comes to the amount of oil being pumped from the ground and the amount we can refine. In a sense, it is supply and demand, but it's all contrived. The world demand for oil is constantly increasing and there's a delicate balance. The war, the weather, the whims of OPEC. In the case of the oil suppliers, they have absolutely nothing to lose while they wait and see what the market will bear. Oil jumped from 60 bucks a barrel to almost 100 in a year's time and look, the world's still turning. Why would they ever drop the price?
The only way the price will ever drop (with any significance) is if some big time oil producer lowered their price. For instance, if Venezuela decided to sell it's oil for 70 bucks a barrel, they couldn't pump it fast enough. They'd still make a huge profit and everyone else would have to lower their prices. But why should they? They can sell all they produce.
So, in a sense, it is a "conspiracy". Nobody has to sit around a table in some mysterious castle determining the price, all that's needed is for greedy men to take advantage of the market.
By the way, oil will break the $100/barrel mark in about 4 weeks, the price of gas will reach $3.50 at that time, and it won't go down. You saw it here first.

Answer 4

There are a number of reasons for the prices to be so high. Greed, of course. For the past couple of years, we've been hearing of record profits from the major petroleum companies.

Then, factor in the unrest in the Middle East. If the consumer is afraid that the supply chain can/will be severed, they won't gripe too much about a rise in price.

Of course, there's also the fact that we have become too heavily dependent upon a resource that cannot be renewed.

Perhaps the only real way to get the cost to come down would be to use public transportation (or walk) for an entire week. Maybe, if enough of us did this, the oil companies would begin to realize that we do have options.

Answer 5

Oh! Too many factors contribute.
Basically, the significant 'producers', are gifted with one more thing other than rich oil reserves, the survival instinct. Before oil or its use was discovered, they learnt to survive 'at any cost'. This has trained them to 'think' of exploiting others using oil as a resource. So global politics, the concept of economic warfare, currency values, its adjustments, etc.... everything creeps in. The obvious result is that price of gas rises 'at will' ! This product affords the highest 'flexibility' in terms of 'exploiting' the demand & supply parameters! Links could just demonstrate proof of this!

Answer 6

The price of gas has risen so high because the worldwide demand for oil has increased dramatically. BRIC countries (that is Brazil, Russia, India, and China) are all making tremendous efforts to become world class industrial powers. In order to expand their industrial complex they need large amounts of oil to satisfy the increased demands of their economies. This increased demand has created a supply crunch in the oil market and has resulted in increased prices. At present, the per barrel price of oil is at or near $100 per barrel, but perhaps by this coming Spring, the price could drop substantially to perhaps the mid or high $80 dollar mark. On that basis, we should expect the pump price for gas to drop to under $3.00 per gallon.

Answer 7

It could very well be the oil companies, although I'm sure only a very small handful of people would be able to provide absolute proof that a false shortage has been created by a conspiring oil elite.
So, short of having an oil tycoon blow the whistle on the whole gas price conspiracy, there are many reasons why the price of gasoline has risen so high.
Part of the reason the price of gas is so high is because the price of crude oil is on the rise. Last year we had hit record prices in the $60 to $70 range per barrel (bbl). Within the past few weeks, we've hit close to $100 per bbl. The cost of crude oil is affected by supply and demand (surprise, surprise!) Supply is affected by OPEC, tensions in the middle east, weather (which affects barge transport of oil), refining capacity, global demand, and government regulations and taxes (which are about $.50 to $.60 per gallon).

Global demand has increased in the past few years, particularly in China, so of course this affects supply stateside.

Our refining capacity in the U.S. has been sufficient enough to keep up with the demand for the most part, but EPA regulations have made it less profitable for oil companies to do refining in the United States, and sometimes the EPA regulations are relaxed, very much to the chagrin of the people in the surrounding communities. As an example, this summer when the State of Indiana permitted BP's Whiting Refinery to increase the amount of ammonia and total suspended solids output as part of the refinery's $3.8 billion expansion, the city of Chicago protested that it didn't get to even be a part of the licensing process, since it's Lake Michigan beaches are right upshore from the refinery. In the face of public outcries, BP stepped back and instead decided to recruit Purdue University researchers to help them develop better filtering methods for the water that is released back into lake Michigan (the water comes from Lake Michigan, mostly used for cooling, and 99% pure water is returned after it is filtered). If successful in developing the filtration system, that would mean an additional 1.7 million gallons of gasoline per day. Would that be a big relief? No. Fractions of a penny, perhaps, especially considering the cost of developing an entirely new water filtration system.

See? It's easy to say "just refine the stuff even faster," but then you compromise the environment or safety, and nobody wants another Texas City explosion like we had a couple years ago that killed 15 contractors. There was also a refinery fire in (I believe) Oklahoma, and an electrical problem at a midwest refinery in Toledo had slowed production this past summer.

Once it's been refined, the gasoline and diesel is sent by pipeline to the terminals and from the terminals to the tanker trucks, and from the tanker trucks to the gas station, or to a commercial customer. In order to prevent the terminals that supply the fuel from running out, each fuel terminal has set allocations for each stockholder, channel of trade, as well as each jobber, reseller, company-owned station, or contract customer. They're each given a certain amount of fuel that they're allowed to pull from a terminal within a specified time period. Despite these efforts, fuel terminals physically run out of fuel on a regular basis, because either some stockholders or customers take more than they're allowed, or because the supply isn't enough to meet the demand. Also, for safety reasons, if a customer has 1 gallon of regular unleaded remaining in their allocation, they will have a full truckload because of the transport safety issues associated with having a tanker compartment with fuel sloshing around.
When a terminal runs out of fuel, the carriers may have to travel across an entire state, or even into another state, making the cost of delivery higher.

I could go on and on, and I don't know if any of this made sense, but I'm going based on my knowledge from working in the fuel supply profession. That being said, I also don't have any links to provide for a lot of this stuff, and I probably didn't cover all the bases, but it's hard to package all of the complex factors that go into fuel pricing into a nicely packaged nutshell and expect people to swallow it.

Answer 8

We have plenty of oil. The problem is we have to buy all of ours from overseas because the enviromentalist whackos that live in this country cry that we are killing the wildlife and destroying the earth. Gas would go down if some people would just quit crying!

Answer 9

It is a complicated mixture of reason and emotion.

The reason is based upon facts like the war, the desire of the capitalist to manipulate physical supply to increase perceived demand, and the speculators in the market place who are gambling that the factual events will continue to multiply and bring about fear, greed, and more crisis.

The emotion is based upon the desire of nearly everyone associated with the stock and commodities markets to maximize their wealth so they may buy the latest fad and have a secure old age. There is also the factor of gambling to win a point of view through educated guesswork to justify their own existence, as well as power.

This combination has existed since man and womankind discovered that there are things that others want and will go to untold lengths to attain them.

Welcome to the real world, kiddies. The interplay between economic factions is being played out with deadly consequences that will affect you for the rest of your lives.

Answer 10

It is many reasons, and for those reasons, the price of oil will continue to rise, like it has been doing.

What are the odds of a war with Iran?
Pretty high seems to me.
What can Iran do in retaliation?
Let me count the ways.
Increase the cost of Middle Eastern Oil ten times, what it now is.
Do our leaders know this?
I think they do, but need to be reminded, since there are so many other things to distract them.

OPEC wants to maximize their profits from the sale of oil, without undermining their markets. Not all oil suppliers are members of OPEC so they do not have total control.

Supply and Demand on International scale

Supply is eroding, as various places like North Sea dry up, not increasing, due to US legislation banning oil drilling off East & West coasts because the interests of lobbyists interests there, more important than best interests of US economy.

This means that domestic oil comes mainly from Gulf Coast (Hurricane target rich environment lots of eggs in one fragile basket) and Alaska (a hostile environment with fragile infrastructure) whose supply recently had to be cut in half for a while due to one oil company cutting corners on pipeline maintenance.

There is an effort to convert to biofuels from agriculture, which has certain short term and long term consequences. Short term, since Brazil decades ahead of US in developing this, if we are successful at weaning the nation off dependency on Middle Eastern Oil, of which I highly doubt, will will replace that with dependency on Brazilian biofuels, which currently are more expensive than Middle Eastern Oil. We have an enemy down there, by name of Venezuela. Can they disrupt that supply? Look at a map. Yes they can.

Demand is skyrocketing, as formerly under developed nations like China and India join the developed world, and along the way are experiencing better than 10% growth rates in adding industries that consume Oil.

Oil futures spectulators are a nervous lot. When terrorists strike in Nigeria or Saudi Arabia, it means temporary disruption of supply in a tight market, so the speculators make the situation worse.

Answer 11

I think besides all of the above,it also has to do with the rise of the cost of living. Although I don't think it has risen That much, but the standard of living is getting so high that it is scary. We need so much more with our multiple cars, the size of the vehicles, and goodness knows that all of the new fangled gadgets we all want have to be delivered. I wonder how much gas it takes to travel to any of our satellites. Do they use gas at all?