Rising Gas Prices!

[Kim 0]

So gas prices cost at least $2.80/gallon where I live. Is this ridiculous or what? I know supply is running short, but aren't we supposed to have at least 10 more years left? Does anyone know why gas prices are so high now? Is it the situation in Iran? Does price gouging have anything to do with it? I'm sure it does...and I think all oil executives should rot in their own piles of cash. What does everyone think about boycotting gas for a day? Or not buying gas from certain companies? Would this help the problem any? I live in Atlanta, GA, and it's impossible to go anywhere without a car.

[xaetos 0]

Last time I passed a gas station, we were at $1.11.6 CDN. Thats the highest its been after the huge decline after the whole New Orleans thing.As for why.. my dad explained it to me the other day. Something about the middleeastern countries in war or something, and therefore there is a perceived potential decline in the future availability of oil - ie, all the oil rigs are going to be (potentially) blown up, and less oil rigs means less oil which means higher prices. He also said something about those countries liking the ability they have to cut production of oil whenever they want to raise the price. Power trips maybe?

[Blacklaser 0]

2.80$ a gallon is dirt cheap, in some european countries poeple pay as much as 6$ or 7$ a gallon, the best way to save on gas is to reduce overall consumption. In other words drive a car with high mpg, learn a few tips on how to save gas, walk across the street to buy that box of donuts, etc. Oh btw, reducing overall consumption is also the only way to get gas prices to come down. Boycotts of one day won't work since poeple still need gas and they'll just buy more the day before or afterwards. Boycotting a few companies won't work either for reasons of market dynamics.What do we learn from all this: Drive a low mpg car with hindsight and save big on gas. Now everybody knows that an Audi A4 is not the best car to choose when going for fuel economy, but Audi did a nice job. I managed to drive an Audi A4 in 6th gear at roughly 60 mph behind a truck at above 65 mpg which basically means I was driving cheaper than most Americans even though I paid 2 to 3 times the price to fill the tank and its just a great feeling if you can go more than 800 miles with one filling of the tank. I Admittedly this was an all-day highway trip from Luxembourg to southern France but it and I was not able to keep it at >65 mpg during all of the trip but it gets my point across.

Edited April 27, 2006 by Blacklaser (see edit history)

[MaverickFang 0]

Its bad when your pusing $60 for 20 gallons...

[terminal2k 0]

the world needs to change the way it looks at cars, we need more cars like elecrtric cars and ones that use less petrol or alternative fuels (LPG, natural gas, solar maybe?) I personally don't own a car and have no intention of buying one. if you need to get around that badly there are always things like scooters and bikes that use much less fuel. Governments need to look at making much more efficent public transport networks so that cars are no longer needed within cities. i spose thats a bit too much of a dream.....

[Blacklaser 0]

Its bad when your pusing $60 for 20 gallons...

As I said earlier... try living in Europe, poeple have been paying 5$ and up a gallon for a long time and nobody has been complaining.

[Farseed 0]

So gas prices cost at least $2.80/gallon where I live. Is this ridiculous or what? I know supply is running short, but aren't we supposed to have at least 10 more years left?

Does anyone know why gas prices are so high now? Is it the situation in Iran? Does price gouging have anything to do with it? I'm sure it does...and I think all oil executives should rot in their own piles of cash.

What does everyone think about boycotting gas for a day? Or not buying gas from certain companies? Would this help the problem any?

 

There are a handful of reasons why gas is so expensive right now. There was an analyst from the Wall Street journal on The Daily Show last night with Jon Stewart who did a good job of explaining most of it.

Demand

Worldwide, demand is up. Other developing countries are seeing their demand rates increasing more quickly than here in the US and other more industrialized countries. So not only do gas hog countries such as the United States demand a lot, you have relatively newer populations coming into the gas craze as well. More countries are going to the bargaining table for more gas, which drives up prices for everyone. Seasonal demands also increase the price for a gallon of gas as the travel season starts for the northern hemisphere, which is home to most of the industrialized populations of the planet. Simply put, all of the different forms of demand increase the price of gas.

 

Supply

At least for the last 5-10 years, there have not been any new domestic sources of oil found and/or drilled, so supply has not increased. As more people (see above) are asking for the same oil barrels, the price naturally goes up depending on how much we are willing to pay for it. Interest groups for years have prevented US corporations from exploring domestic territories for new oil reserves within US borders, namely Alaska and the Gulf of Mexico. If we had allowed ten or twenty years ago oil companies to expand in order to meet the growing demand of the United States and the world, our gas crunch would be considerably less crucial than it has become. For democrats who blame the Gulf Wars on oil, those same democrats could have prevented those wars (according to their own reasoning) by allowing oil exploration to begin with, which would have increased our domestic oil supply. As the demand rises and our domestic supply remains stable, our prices go up. Add to this the inflammation from the increased demand must be met by hostile, foreign sources and we have steeper gasoline rates.

 

Congress

Last year the Congress enacted mandatory use of ethanol additives to our gasoline, and by law gas suppliers must make the changes. Ethanol is produced by heavy refining of corn, and the legislation was meant to assist US farmers by adding an extra market for their produce. Refitting and processing costs to the infrastructure have been passed on to the consumer as well as delaying delivery of 'legal' gasoline. The latter effect further drives up consumer cost as legally purchasable gasoline is less available (see supply).

 

Conflicts

Everyone's favorite scapegoat is the Iraq war. Fair enough, but there are other hotspots too that supply oil to the world and are under dubious governmental control. Nigeria is a good example, as well as former Soviet territories near the Caspian Sea. As different regimes control the world's oil sources at different times over the decades, the policies of oil producing governments change. Since most oil producing countries produce little else other than oil, and their local conflicts bleed their economies dry, the governments continue to lean more and more on oil production to fuel their wars and (wishfully thinking) rebuild their countries.

 

Distribution

The two hurricanes that smacked our gulf coast last yearknocked out some oil refineries and other critical infrastructure (standby for more hurricanes this and every following year). We can buy all of the inflated oil we want, but we still must refine it and prepare it for consumption. Repairing these facilities has cost corporations money, and these costs are reflected in your local gasoline prices. As gas prices inch upward, so does the cost of transporting it via... gas/diesel using vehicles, which in turn further drives up the price.

 

Speculation

An intangible and significant factor of gas prices is market speculation, or oil futures. Basically it means how investors feel about the future accessibility of oil. The a large number of investment companies feel the world's oil supply is going to be tight, the price goes up simply because we expect it to. Some companies act on that and buy more today since tomorrow they expect it to cost more. That drives present-day demand up, which further drives up gasoline prices.

A lot of this cycle feeds on itself, which is a very dangerous process indeed.

 

Another scapegoat is 'big oil companies' who are posting 'record profits'. Companies operate on margins, meaning they try to produce a certain percentage of profit depending on their gross income. So if they keep the same margins, they make more profits simply by doing more business. Your own household works in much the same way. If you get a new job, you rent a larger apartment or buy a bigger house, purchase a nicer house and probably eat more/better food. As your income increases, you likely spend the same percentage of your income on the different necessities of life. Does that make you a 'big oil company' with 'record profits'? These companies are also having to reinvest more of their profits into future reserve exploration and are hedging against the speculation argument mentioned above. We're going to yell at them if they don't have the gasoline ready, and they won't have the gasoline ready if they can't buy the oil. They're going to need 'record profits' if they're going to be able to afford the oil that we require.

 

The only cure for this is to shift our energy paradigm away from oil and gas. At least decrease the dependency immediately, at best replace it totally in the future. We as a people must make the long term commitment to do this and stop whining how the fault is somewhere else.

 

Are you ready?

[D3nver 0]

i say every country that xports stuff to the middle eastern countries (excluding israel) shoots the prices up so we starve them of recources until they lower prices they hit us we hit them 3x harder c how they like it then cause their economes to collapse some how and laugh at them as they fight for a piece of bread

[no9t9 0]

people in north america have been lucky that they pay much less for gas compared to most other countries. Offering tax breaks and other stuff for gas only makes the problem worse. If gas gets expensive enough, more people will take transit and find alternative fuels. Have you noticed how many huge SUVs have been produced in the last 10-15 years? most people driving SUVs have no intention of using it for its real purpose. People drive SUVs to work. Just moving their own body to work and not hauling anything. That is a huge waste of gas.

[Blacklaser 0]

i say every country that xports stuff to the middle eastern countries (excluding israel) shoots the prices up so we starve them of recources until they lower prices they hit us we hit them 3x harder c how they like it then cause their economes to collapse some how and laugh at them as they fight for a piece of bread

That's such a naive answer... if we stop exporting to them, they'll just raise the price or worse stop exporting oil altogether.... see who's economy collapses first... the world is relying way to much on it at the moment to even think about anything like that.

[Sinari 0]

Come on. We live in the 21st century. Can we not figure out something better than gas which also ruins our world? We're supposed to be the smart ones of the future and we don't seem to be doing anything about this but raising gas prices. Keep prices the same and work on better technology is what I say...

[Kim 0]

Come on. We live in the 21st century. Can we not figure out something better than gas which also ruins our world? We're supposed to be the smart ones of the future and we don't seem to be doing anything about this but raising gas prices. Keep prices the same and work on better technology is what I say...

I agree that we need to find more efficient fuels for our vehicles, and I'm sure there are really intelligent people working on it. Actually, there are alternative fuels, like http://forums.xisto.com/no_longer_exists/
the problem is making the transition from gasoline to these alternative fuels.
I know all about driving below 60 mph to increase fuel efficiency, carpooling, and all that. I think more people will do that as gas prices increase. But the thing is, as gas prices rise, the people who are hardest hit are the ones in the low and middle income brackets, because they have less money and they have to pay the same as everyone else for gas. Also, it's estimated that we will be paying $1000 more per year for gas if this gas price continues to rise. $1000 is a lot of money, no matter how you look at it.

[mama_soap 0]

Me personally waiting for a solar-powered car... wonder why Sun Microsystems has not come up with something along those lines yet... I'm a huge fan of anything that makes petrol unnecessary, for example, the cycle - but I still use public/private transport for my regular travel needs, I'm afraid

[jlhaslip 4]

Your $3.00 per gallon gas is cheap.I just paid $1.139 per litre for gas. Multiply that by 3.78 to get the cost in Cdn Dollars. and then multiply that times .895 to convert to US dollars. Just a second, I have to take off my socks to do the math...*pause*That would be $4.305 times .895 equals $3.853 per US gallon. And there have been no Hurricanes in Alberta. Our Oil costs are tied to the World price, you see. The Government gets to make more money that way... unlike in the States where the Oil companies get to keep it.

[Arigato 0]

Yes the gas prices are high but I think it is a good thing. With the issue of global warming it is becomming increasingly important that we reduce greenhouse gas emissions. It seems to me that a lot of people are selfish and would destory the environment just to save a few dollars. The high gas prices provides these type of people with a personal motivation to switch to alternatives methods of transportation.