Gas Prices

Our life is full of routine. Each morning everyone has their own personal schedule of what they do when they wake up from a peaceful, black slumber. As we grow older we soon develop more habits into our routine, one of those include buying gasoline. At least once a week we drive, thoughtlessly, into the gas station, not once thinking about all of the work and thought that has gone into producing this gas. We do, however, take notice of the prices which have a direct effect on our lives.

The prices of gasoline are always changing, whether they're increasing or decreasing. But the cost of this highly used product is not determined by only one factor, it's determined by many different factors combined. Some of these factors include breaks in the distribution network, for example when Hurricane Katrina hit in 2005; and general instability in major oil producing regions such as South America and the Middle East. A key factor in the price of gasoline prices is supply and demand, and the demand around the world for this product. Prices often rise during summer, Thanksgiving, Christmas, and other times when people are expected to travel. For example, in the summer Americans' gas demand increases by 5%. The greatest factor in determining the price of gasoline is the cost of crude oil, from which gasoline is produced. The cost of crude oil is determined by the worldwide supply and demand and OPEC's (Oil Producing and Exporting Countries) decision on how much oil to produce and sell to other companies. Also, since the number of refineries in the United States has decreased  and there is a high demand for gas, it results in a rise in gas prices. If a refinery has downtime, production delays, or mechanical troubles, the aftermath is a sudden spike in prices. The value of the U.S. dollar also affects the cost of gasoline. Factors that vary with an individual's location include how far away they live from the main source of gas in that area and the competition among gas suppliers in an area. If there are few gas stations, such as in a rurul area, the cost is higher than if there were many gas stations in an area because they'd want to lower their prices to attract consumers.

Each and every cent you pay at a gas station is asked of you for good reason, and it's not simply going into the pocket of some rich, gas station owner. At least 50% of the gas prices are dependent upon the cost of crude (although it takes about seven weeks for local gas prices to reflect a change in the crude oil prices). 20% is used to cover the cost to refine oil and the procedure to convert the crude oil into gasoline. Local, state, and federal taxes demand yet another 20% of the gas prices, and the final 10% is the expense of the gas company's advertising campaign.

Gas prices have an effect on almost everything from a global to an individual scale. On a small scale, to adjust to higher prices, households are cutting down on their consumption of goods and services other than gas; in businesses non-energy costs are being reduced. Besides this, fuel-efficient vehicles are replacing existing vehicles in both households and businesses. Tourism is affected since airlines, cruise lines, and bus lines need fuel to operate. To heat and cool buildings, hotel, resorts, and restaurants also need energy. This causes the cost of travel to increase which is causing the tourism industry to suffer. Towns that depend upon tourism for their economy are falling in this area, and we need to do something fast before these beloved small towns full of memories slowly disappear from our lives. The amount crop farmers are able to produce each year is also impacted by the high energy costs since farmers use energy in their process of fertilization. Farmers have to cut their production due to these high costs. In turn, the cost of food to customers has increased because of this decline in production. As many other products also are beginning to increase in price, suddenly it will be unbearable. The overall effect of these variables results in this: since the price of gas is rising, the cost of shipping and transporting goods increases, which causes the products to be more expensive to the consumers. As a result of so much money being spent on fuel, consumers have less money to spend on non-necessities such as restaurants, entertainment, accessories, etc.. These businesses receive less customers and profit; therefore, it might have to come down to cutting jobs and eventually the entire business.

The big question is, what do we do to solve this circle of crisis? Luckily, there are several options. We need to increase our fuel supply which will lighten the pressure on gas prices. Supporting alternative energy research and development will also help. Most of all, we need to conserve. Although taking small steps such as individuals driving hybrid cars, biking to work, and using energy efficient lightbulbs helps these issues, it's only the beginning. We need to take steps on a global scale to truly solve this problem. Using scientific research and development and energy conversion to reduce gasoline prices and consumption is vitally important at this moment. But with perseverence and determination we'll soon be able to take control of the cost of gasoline.