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Gas Prices Essay

666 words - 3 pages

A main question among the average America in today’s society is: Why are gasoline prices so high and expected to go even higher? This has been a main concern to the average American. After all, our country is dependent on crude oil. Without oil American’s economy would crumble. So how could the average American help with rising cost. Unstable conditions throughout the world create uncertainty within the global marketplace. One problem is that wholesalers are unaware if they will receive enough oil; therefore, they are willing to pay higher prices. With the problems between America and some oil producing countries such as: Iraq, Venezuela and now Saudi Arabia, the uncertainty of acquiring oil rises on the global marketplace. The potential for supply drops increasing the demand and the gasoline price increases. This is one of the main reasons why gas prices are so high. OPEC, the international organization, is another reason why gas prices are so high. What OPEC does is cut their oil production as consumers have seen recently. Supply is dropped yet the demand is high. As the OPEC nations reduce supplies, other non-OPEC countries may increase their supplies, thus increasing their profits. Occasionally, even an OPEC country breaks away from the OPEC agreement of reducing oil supplies and increases their production. This is often done without the consent of the other OPEC nations (N.A.,2008).Within the United States the economy has continuously risen. Gradually, as our demand for gas has increased over the years more gas stations came into the marketplace. The problem with this is most of the gas stations were owned by the same corporations. With all the main corporations owning all the gas stations they had no real competition, so they could raise there prices as they see fit.Another reason why gas prices are so high is because of the strict gasoline regulations of the U.S. (Gavin,2008). The refined gas must meet specific emission standards. It is costly for a refinery to meet the required standards. An exporter can then sell...

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