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The following page explains the components of gas price that answers exactly your question. It also contains a link to another article describing why the gas price fluctuates. Hope you find it useful.

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wisteme ...

by wt526

2 years ago

Asker's Rating: 

gas prices is high because of the manpower and cost it takes to take it out of the earth. since it takes millions of years to form its also depleting rapidly. so who ever has the oil can set the price. in our case the middle eastern nations. almost all our technology and machines runs on gas.

by sc2zabala- 2 years ago

Supply and demand.

by kollector- 2 years ago

It is supply and demand and also investor speculation plays a large role. Edit: When there's not a lot of something and lots of people want it, they're willing to spend higher prices to get it (Think superbowl tickets). Since China and India's economies are booming, they are able to afford more cars and therefore, need more gas. So demand is going up. At the same time, supply is staying about the same, so, people want more gas than there is. The price goes up since oil companies want to make as big a profit as possible, and because less people will want the gas at higher prices, it doesn't run out. But the price doesn't only reflect the situation today, it also reflects what might happen in the future. This is due to investors betting that something will happen (hurricane, terrorist attack, strike in Nigeria, crisis with Iran) which will cramp supplies rather than lower demand (recession in the US, etc). So the investors also bid the price up, thinking there will be more demand or less supply in the future, even if there's enough to go around today. The main issue with oil is that no new large oil fields are being discovered, but at the same time, the world's economy is essentially based off of oil. As the economy of the world grows, demand for oil goes up. Since supply is staying about the same, the price goes up. Ultimately, the price will get high enough that it will spur development of new technologies. We're already seeing this happen with solar, wind, and hydrogen cells appearing. As the price of oil continues to rise, you'll see more and more of these new techs. Hope this makes sense.

by 006- 2 years ago

Supply and demand. With China's 2 billion people, many of which are driving now, along with new factories being built by westerners, that need fuel, oil becomes more expensive. There is a finite amount of oil, being used by more and more people and industry. If you think a barrel of oil is worth more than the present $95, then buy into it hoping for it to rise even more. If you think it is overpriced, then sell hoping for a decline in value.

by Mr. Q- 2 years ago

There are several factors in the cost of gas. The price of oil - that market looks at the supply and stockpile of oil. Anything that might reduce the amount of oil being pumped and delivered will increase the price. OPEC does try to control the flow within their control. Hurricanes that affect the gulf pumping can affect it. Price of refineries - Capacity of refineries can slow down the supply of gas itself which would increase the price. Government regulations can increase the cost and decrease the flow of gas. There is a requirement to have different gas during the summer months to reduce pollution. That requirement increases cost and if they don't change fast enough, that can slow production and increase costs. The oil companies themselves affect the cost. Notice that all stations are the same price. The oil companies force their stations to have a consistent price. So they can force that price up when they want.

by ustoev- 2 years ago

Price gouging by oil & gasoline companies.

by Feeling Mutual- 2 years ago

Because you are addicted to gasoline. Each year you buy more and more gasoline. It does not matter if the price is $1.00 or $10.00 You are still going to buy it anyway. One day you will buy a 1998 Volkswagen Jetta wih a diesel engine or a 2008 Honda Civic GX with a natural gas engine and you will reduce the number of gallons of gasoline that you buy each year to 0 When 1,000,000 people do the same thing as you then the GASOLINE PRICES will drop.

by Frank Castle- 2 years ago