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The Reason for High Gas and Fuel Prices

Updated on April 28, 2011

it is becoming a real social issue in the fact that everything is impacted. From the commuter who travels to and from work, commuters who take trains or buses, rig drivers carrying consumer goods, or airlines carrying cargo and passengers. Nothing more impacts our daily life and pocket books than fuel costs. 

Many feel it is the oil companies greed that jack up prices. Maybe so, but that element is probably small. There is the issue of refinery capacities and that parts of the country require a more stringent type of gas similar to California. This takes it toll. On the west cost, it is a deal if you find gas at only $4 gallon because the norm is $4.20 and much higher. Even the national average is now $3.90. In Europe, it is $8 a gallon. That is comforting.

The real cause is global. Since 2000, the US consumed mainly 20 million barrels of oil daily. Basically, our use has flatlined. In that same period,the four biggest emerging third world nations (China, India, Brazil, Saudi Arabia) have gone from 10 million barrels daily to 18 million barrels daily. Projections show that by 2013, their need will more than the US by a little and by 2015, they will need 23 million barrels daily.

Last month, all of the US refineries refined 9 million barrels a day and the price  of one barrel of oil is now $113.00 and rising because of the competition from the four countries. China is the main culprit and are basically forcing many into smaller cars or hybrids to reduce fuel costs. The other issues that occur in the Middle East, like war and terror attacks only compund to the problem but are not the main reason for  high fuel prices.

Get use to it, it is only going to up, up and away.

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    • perrya profile imageAUTHOR

      perrya 

      7 years ago

      Maybe, but I think it is China and India. They are catching up with us.

    • someonewhoknows profile image

      someonewhoknows 

      7 years ago from south and west of canada,north of ohio

      I think the oil companies as well as the government are trying to force people to buy more fuel efficient vehicles.That way they can keep prices high and not lose any tax revenue for the roads and oil profits for the oil companies ,and kickbacks to politiciams who go along with the idea.

    • perrya profile imageAUTHOR

      perrya 

      7 years ago

      A car getting only 20-22mpg is simply not good enough anymore.

    • profile image

      Howard Schneider 

      7 years ago from Parsippany, New Jersey

      You are exactly correct Perrya. The developing countries such as China, India, Brazil, and others are seeing their demand levels skyrocket with their booming industries. There is no way of escaping this no matter what our refining levels are or how much oil we drill domestically. We simply need to develop alternative energy sources wherever we can to offset this. But no matter what, oil prices will continue to steadily rise.

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