It's happening again.. I heard it on the news today. The price of gas is going to go up another 30 cents by the end of the week? At the time I am writing this gas is currently 2.59 and it is July 2009. I have gotten comfortable with my gas prices. Not too terribly high nor are they too terribly low.  After I did some reading I realized the gas prices had been slowly creeping up. Last month is was probably 20 cents cheaper. I had put in the back of my mind that the price of gas was almost four dollars this time last year. Why does it fluctuate so much? Why does it keep going up? In this Hub we will look at the contributing factors.

Two factors play into the rising cost of gas. Factor one: The cost of crude oil ot the refineries and factor two, the balance between supply and demand. It takes nearly 100 barrels of oil to make 47 barrels of gasoline. Furthermore 42 gallons of crude oil makes nearly 20 gallons of gasoline. Strong and increasing demand for gasoline and other petroleum products in the United States and the rest of the world is exerting intense pressure on available supplies. Even when crude oil prices are stable, gasoline prices fluctuate due to seasonal demand and local retail station competition.   Right now Asia is one of the most demanding continents in the world for gas consumption

Organization of the Petroleum Exporting Countries (OPEC) is ordering some of it's refineries not produce gasoline as to drive up prices. Also civli unrest in Iraq and Nigeria (2nd and 7th largest producers of oil in the world) are also contributors to rising prices. OPEC controls more than two thirds of the worlds oil supply and is the only organization to put surplus oil into production quickly.

The price of gas is composed of four different areas. This graph to the right demonstrates what goes into making up our gas prices in June of 2009. Crude oil takes the biggest part of our price by dominating 61%. Taxes were 15 %, Distribution and Marketing were only 10% and Refining is 14%. This of course is based on national Average. As we know taxes fluctuate form state to state. The lowest tax on gas was found in Alaska at 8.00 per barrel and the highest was found in Wisconsin at 32.90 per barrel.  The Federal tax on gas is currently 184 per gallon and the state tax averages 21.59 cents per gallon.

According the the EIA Short term outlook, crude oil prices are currently around 70.00 per barrel and are expected to be around 70.00 per barrel the rest of 2009. The Experts are predicting an 18.00 increase in the price of crude oil in 2010.

What are our alternatives? We have to begin to look at alternative uses of Energy. Perhaps something that could be produced and manufactured right here in the U.S. A lot has been done with electric cars and hybrid cars as well as making biofuel.