Gas Pricing and the Economy

Essay by savanahbaby July 2006

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The subject of increasing gas prices is on everyone's mind these days especially when gas prices are not decreasing as fast as everyone had hoped. Gas prices are dependent on many factors. One of those factors is the concept of supply and demand. People of today are more mobile than ever before. We live miles away from work, school, shopping, and recreational activities. With this comes the increased demand for gasoline, which has lead to a decrease in supply of gasoline to fill those demands.

The decrease in the supply of gasoline can be related to the concept that crude oil is a non-renewal natural resource. Once this resource is gone, it is gone for good and new areas of crude oil need to be discovered. In correlation with this concept of crude oil supply is the thought of where most of the crude oil is located around the world.

These locations usually are in countries where there is great turmoil, mostly over what other country will control the oils. There have been many world events that have occurred in countries where turmoil and hardships are the normal way of life and in return, this impacts how crude oil is supplied to other countries that depend on gasoline for their ways of life.

Another factor that must be addressed here is pertaining to the thought of the increasing price of gasoline and its relation to the weather. Most crude oil refineries are located where major weather events occur and lead to problems with refining the crude oil into gasoline. Along with that, the matter of refineries not being able to keep up with the demand for gasoline creates some problems with refineries. Not having enough capacity for the gasoline amounts that are needed for daily consumption brings about another problem.