Why exactley are gas prices so high?

S

salomon097

Active member
As we all know, gas prices have been high and on the rise for a while now. But why? I've heard a lot of different things like shortages and stuff like that but is it really true? I just don't understand. The oil companies would still be billionaires if gas was $1.50/gallon, so why does it have to be $3+? I don't really understand it. Someone enlighten me.
 
well, were running out of resources.

prices on everything are increasing.

and it encourages ppl to drive less/use public transit reducing emissions.
 
Mainly, yeah. Gas is expensive elsewhere because... its expensive. Its a limited resource that we're used to getting for 20% of what the world normally pays.
 
Its because the oil is controlled by a cartel. They set the price and the output level. And as you can see, the high prices haven't exactly caused us to stop driving. So they will keep raising the prices on us.
 
supply and demand

places like China and India are putting out like 10,000 new drivers a day or something crazy. that's part anyway
 
Americans REALLY have to stop complaining about gas prices. In Canada, we’re paying (Today) $1.20/litre, which is roughly $4.54/Gallon. And Canada needs to stop complaining, because Europe is paying much more than them. Someone is always paying more than you, so consider yourself lucky.

And as to why the refineries charge more than they need to support their families? That should be self explanatory. They’re under pressure to turn a profit for their shareholders. Besides, who wouldn’t make as much money as possible?

Also, crude oil is an exhaustive resource, which damages the environment. High pricing is a way to regulate emissions--->if gas were 1$/gallon, as you'd like, everyone would be driving Escalades and the world would be over within a few years.

Petrol companies couldn't care less if people complain about prices, they know they’ve got a product people crave and are willing to pay out the ass for.

If you can’t afford it, sell your car, it’s not getting any cheaper. Easy as that.

 
because the country's president (venezuela) in south america providing us the oil is being an asshole and stoped exporting it just cuz he hates the world.
 
but like, i saw on the news the other day that a refinery in Texas caught on fire, and as a results, gas prices were going to go up. seriously? because there was a fire at one refinery? i dont understand how something like that can cause a nationwide increase in gas prices. I understand there isnt a ton of refineries out there but cmon
 
I've always heard that oil supply isn't the problem, its the lack of refineries. Not sure how much my AP Government teacher knew about the oil industry though.

We really need to just drill in Alaska if we want oil. Up in that ANWR area theres like 6 billion barrels of oil. Thats also the low estimate for how much oil is there. (http://pubs.usgs.gov/fs/fs-0028-01/fs-0028-01.pdf) Since we only use 20 million barrels a day (http://auto.howstuffworks.com/question417.htm) we could go 2 years and be COMPLETELY INDEPENDENT from foreign oil. Thats just off a little piece of Alaska. Add up the oil in texas and other parts of alaska and we could be independent from foreign oil for even longer. With some sort of government control the prices could be kept low and it would be a great thing for the country.

 
I was reading bout drilling AK too. There was a stat that there is believed to be more oil in AK than in the middle east! People say that drilling would kill the enviorment up there, but most of the prposed areas are tundra or grazeland. Im all for it.
 
thats pretty much it, supply and demand

we will pay as much as the market sets the price at. its always been the market and it will always be that way. like the kid said from Canada, its higher there, its higher in Europe, and its lower in places, like third world countries. its all a matter of what the market sets.

but yeah, it still sucks but we will still pay for it. Haha
 
Wow a lot of misinformation in this thread as usual.

I will just hit on a few quick points because I don't feel like typing for days.

1) OPEC is not a cartel. It is a group of oil producing nations in which the US is not a part of. They regulate oil production for political more than economic reason. Saudi Arabia could crush countries like Iraq and Venezuela by flooding the market for a year. Hugo Chavez recently kicked out all of the American companies, who were taking profits, out of his country in favor of a state owned oil company much like Canada, Saudi to and extent, Kuwait, and several others, china. That is all. America is pissed because there is a large amount of oil there to make money on.

2) Peak oil is a very important term to learn. This refers to the fact that in the very near future if not the present we will reach the maximum oil production globally. We reached peak oil production in the us in the early 80's... I think. So you do the math as the supply flow decreases the price will increase. The US also has a lack of oil refineries. All the refineries are pretty old too.

3) Due to a lot of political stunts the US is able to get oil at very low prices and hands that value over to the consumer. So we are actually getting a deal. Somewhat, there is something called profit and oil companies know how to maximize it.

I left out a lot but half way though I had one of those "What the fuck am I doing" moments and decided to stop.
 
i remember hearing on the news that the last 3 years, gasoline has been the most expensive its been in a couple decades, but gas companies have made the most revenue ever.
 
In the relatively short run (talking in decades, not months), oil's demand curve is extraordinarily inelastic.

Basically, this means that the gas companies can charge whatever they want and you will likely continue to consume almost exactly what you have been consuming.

Seeing as most firms will try to maximize profit, this makes sense.

However, I really don't think gas and its pricing is a problem for two reasons.

1: We're only talking relative short run. I really think in the long run people will switch to using less and less oil and we won't have such a dependence.

2: The reason gas companies have oil so expensive is the same reason I can get a $5 DVD from Walmart. They're all about profit maximization so before you flame on the system realize it has done some great things, and I'm willing to bet most of you benefit from it every day.

 


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Speculation.

Shitty part is, the rising price of oil and the effects on us don't stop at the gas station either. Gas prices go up, transportation prices go up, price of all goods goes up.

YAY!
 
It's not that gas/oil are getting that much more expensive - the bigger problem is that the US $ is getting weaker and weaker.

Inflation is as much to blame as oil cartels, curtailed production, etc.

 
OPEC isn't a Cartel?!?! They are the definition of cartel. A cartel is a group of firms that regulates output to control prices and maximize their profits. That is exactly what OPEC does. Thats why most of the countries aren't outputting at full capacity. If they did then the price would drop and they wouldn't make as much money.
 
So oil execs can make as much money as possible before they're run out of business by the new 'renewable' resources that they've somehow managed to keep from becoming popular up to this point. Problem is everyone is now aware of these new technologies benefits and are starting to want them...

Hate be be so negative, but it is what it is. On that note, I also suggest anyone who wants to get rich to get into one of these 'green energy' companies ASAP, or invest in them now while the entire market is getting shit on.
 
If car compaines can make car's liek these i dont understand why then dont, and why gas is so high? Oil owners are greedy as fuck and need all the money for themselves. GREEDY BASTARDS!
 
our gonna pay 12k-17k for a shitty, ugly box mobile that still only gets about 35 mpg? They dont make them because only a select number of people will buy them. they arent even that much better for the environment.
 
exactly. If they can charge $3 a gallon and we still buy it, then why wouldn't they charge $3 a gallon? And if you think it's bad over here, they're paying about $5-6 a gallon in europe.
 
They are not a cartel. A cartel controls the whole market. A cartel maximises profits.

I am in the industry and OPEC is defintally not a cartel. They are a group of semi stable countries with large oil fields. The purpose of OPEC is to keep one country from flooding the market and then stockpiling. I dont have time right now but look it up.
 
because bush does not want to open Alaska to extensive drilling

aribs are dicks and they don't want to run out of oil destroying their economy

there are deep ocean oil pocket but with current technology are to hard/ expensive to drill same with Siberia's permafrost
 
just going to throw it out there that gas prices in europe are WAY higher (and have been for a while) than they are here.
 
Gas is actually very cheap when compared to most liqueds.

Gas $1/L (for arguements sake)

Water $2-4/L depending

Dish Soap $5/L

Oil $8/L

Coke/Pop $1/L

Milk$2/L

The list goes on and on, I hate the prices too, but when you think about it, its honestly not that bad.
 
Water costs like 2 tenths of a cent per gallon unless you buy bottled.

When was the last time you bought 20 gallons of dish soap, oil, pop, or milk?
 
now factor in the amount people require to live per week and you will realize that it is infact quite expensive.
 
OPEC regulates supply. Investors speculate on the future price of the commodity. OPEC will base their output decision on future demand. Global future demand is expected to increase by 1.9% in 2008 (over 2007 levels). the current speculation is that OPEC will either maintain current levels of supply, or restrict output levels from current levels. They release their output quotas on March 15th (i think). Prices are high right now based on the speculated global increase in demand (1.9% increase), and the speculated OPEC output reductions.
 
buullllllllllllssshhhhhhhhiiiiit

there are almost unlimited oil wells

the prices are high becuse the government knows that no matter how high the prices are, there will be almost no change in the demand, ppl wont stop buying it, theyll jsut bitch about it more and ride their bike to work once a month

think about it

do you see a price rise, and say "dammit, im not driving for the 6 weeks or until it drops by at least 50 cents"

you might try to drive less, but our whole nation revolves around driving and is geared towards motor traffic, and even if you wanted to, its hard to avoid

so even if people try to drive a little less, it doesnt make enough of an impact on the demand for the stuff

 
You are a fool. Unlimited oil wells? You know that there is almost no oil left in the united states right? There is a lot of oil left in the ground around the world but getting it out is the problem.

You don't know what you're talking about. Go to google and type in "peak oil" and you will learn.
 
did i say american oil?

ill admit saudi arabia is not the best trading partner, but its not like america is rationing it and thats why its expensive
 
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