Running on Empty
As gas prices continue to rise to almost $4 a gallon, more and more people are beginning to wonder if and when it will ever end. Some are even wondering what has happened to cause the prices to jump up in the past years. So, let’s start with the question, “What is causing gas prices to skyrocket?”
Rising Prices
According to National Public Radio (NPR), the biggest factor in the growing gas prices across the United States is due to the price of crude oil as well as the cost of refining it. For example, if you purchase gasoline for your car at $2.90 per gallon, approximately $1.60 of that is crude oil. The remaining 55 cents covers taxes and distribution costs/marketing. The cost of crude oil has been increasing over the past few years due to supply and demand. The countries that produce crude oil are experiencing supply problems due to refineries being shut down for maintenance as well as those refineries that are still recovering from weather-related incidents beyond their control.
In the end, however, the global market is what has the final say in setting crude-oil prices. Translation: the market decides what most people would be willing to pay for at the gas pump. This is what is causing the gas prices escalate. Normally, this wouldn’t be a big deal, but because other countries (like China) are growing, they require more fuel. Additionally, because there have been political problems between oil-producing nations and non oil-producing nations, this has caused a bit of a predicament when it comes to getting oil prices lowered.
Trends towards Change?
While many Americans claim that they are saving gasoline, the statistics show a totally different story. In fact, more Americans than ever are purchasing gasoline. Let’s face it- none of us want to end up paying $4 per gallon for a tank of gasoline, but if the price reached $4 per gallon, we’d probably still pay it. Now, there are other fuel alternatives that are in the works to help ween Americans off of their addiction to regular gasoline and these include:
- Ethanol- alcohol based, made from starch crops such as sugar cane, corn, barley and wheat. When you mix this with gasoline, it can fuel cars.
- Natural Gas- made up mostly of methane and hydrocarbons.
- Propane- liquefied petroleum gas.
- Hydrogen-still being experimented with
- Biodiesel-created from vegetable oils, animal fat or recycled restaurant greases. When you combine of these elements with petroleum, it fuels cars while giving off less pollution
- P-series fuel- still being experimented with
- Electricity
The Answer to Fuel Economy
Drive less, buy a smaller, more fuel efficient vehicle. Gas prices won’t be going down anytime soon, but at least we can be prepared.
[...] you’re like most other drivers these days, then there’s a good chance that your running on empty when you get behind the wheel. Everyone is trying to stretch their gas tanks as far as they [...]
Look, i don’t know how many times people can wonder about what is going on with the oil prices. Its called “PEAK OIL” Google it and do some research if you don’t know. The worldwide production of oil (supply) has peaked, with even heads of shell, and other majors saying that worldwide production will never get above 100 million barrels a day (lucky if it gets even close to that in my opinion). Demand is continuing to rise reguardless, so in this market you will continue to see escalating prices until people are FORCED out of the market (demand). It’s economics 101. Get ready for $200 a barrel oil and beyond in next few years.
I don’t place as much faith in the ‘peak oil’ theory as others. Crude has become a very profitable commodity for some in recent years. Is it being brought on by peak oil, or is peak oil the means to which some disguise their greed.
The bottom line is the cost of crude for the average American in this country today is slowly, gradually eating us alive, as individuals, as families, and as business owners. If it continues, and it will, there will be nothing left but a vast wasteland of what was once a profitable economic outlook for all. Left in the rubble is of course ‘big oil’ with nary a scratch, looming over us. Bigger and more profitable than ever at the sake of the oil-thirsty public. Sound crazy? We all know the astronomical profits raked in by the oil companies lately while those at the mercy of ‘big oil’ fold up due to over-head they cannot compensate for. Do you honestly think the oil companies are feeling sorry for what is happening to the economy brought on by operating costs nobody could have predicted or planned for. No, that is not a tear of sorrow in the eye of oil companies this day, it is a tear of glee and of greed.
I can’t quite buy into the ‘peak oil’ explanation. I think it is more of a ‘peak profit’, The ONLY people who are not being hurt by oil prices right now are the oil companies themselves, and wall street. If I had a well pumping up and down in my back yard or had enough cash left over after filling the tank to invest in crude futures, maybe all this would be easier to swallow
“The countries that produce crude oil are experiencing supply problems due to refineries being shut down for maintenance as well as those refineries that are still recovering from weather-related incidents beyond their control.”
This would lead to an increase in the supply of crude oil and a decrease in the supply of gasoline….so the price of crude would go down but the price of gas would go up and that has not been the case.
“We all know the astronomical profits raked in by the oil companies lately while those at the mercy of ‘big oil’ fold up due to over-head they cannot compensate for. Do you honestly think the oil companies are feeling sorry for what is happening”
The oil companies don’t set the price of the oil, the futures traders do. Do you honestly expect the oil company to say to the consumer, ” You are willing to pay $120 per barrel but for the good of everyone else I am only going to collect $30.” How long will that company be in business? And because they won’t do that they are called greedy. Did you call them benevolent when the price was $20 a barrel a few years ago? I hardly think so.