It’s no secret that gas prices are on the rise once again in the gulf coast region. As consumers scavenge to find the cheapest gas stations in their area, there is one question that pervades each of their minds: Why do gas prices continue to rise in the summer months? The answer can get complex, but to put it crudely, the reason is oil.
Crude oil has been, and will continue to be, the reason for the constant fluctuation in gasoline prices at stations, and the price of crude oil is directly linked to how much is charged per gallon of gas. According to the Lundberg Survey, “The U.S. average retail regular grade gasoline price dropped 5.44 cents per gallon in the past two weeks, to $3.9127. It is the first U.S. average decline since mid-December and comes thanks to lack of upsurge in crude oil prices…Crude oil will decide if pump prices keep falling. If they remain at around $103 per barrel, we may well see further drops of five to 10 cents soon. If crude shoots back up, then gasoline price cutting will be arrested.” An important relationship exists between crude oil prices and gas prices, and unfortunately it is something that we must put up with until we discover an alternative fuel.
While high gas and oil prices have a frustrating effect on consumers, one must address the other problems that it creates. For example, how does this fluctuation of gas and oil prices effect the economy? Although the rise in gas prices has made the population considerably more conscious of their own financial capabilities, the increase has not deterred people from buying gas. The buying and selling of gasoline and crude oil is still flowing powerfully, but many of the refineries in charge of manufacturing these products have gone under. According to ConsumerEnergyReport.com, “In recent years, demand for gasoline has been down due to high prices in the U.S. As oil prices have climbed, refiners have struggled to pass on all of the increased costs of those higher oil prices to consumers. They would like to sell gasoline for a bit more, but the reduced demand keeps their margins low for the most part. Ultimately some are forced to shut down. That will also mean higher gasoline prices for consumers.” Naturally when these refineries are shut down, jobs are lost and people are thrown into dire financial straits. One event that would have curbed the current economic gas crisis, and might still have the opportunity to, was the construction of the Keystone Pipeline from Canada down to the gulf coast region. The construction of this pipeline would have allowed for more ease of access to crude oil from Canada, and would have provided countless new jobs for individuals that were unable to keep their positions in refineries. But anyone who has kept up with news of the gas and oil crises in recent months knows that the construction of the pipeline was deferred by President Obama, at least for the time being.
The amount of press that gas prices are receiving this year has reached a record high, and it seems that Americans are becoming more and more conscious of the recurring problems we face around this time every year. Information from People-Press.org states that: “Rising fuel prices topped the public’s news interest last week…about half (52%) say they followed news about rising gas and oil prices very closely. Last spring, another time of concern about fuel prices, similar numbers said they were following news about rising gas and oil prices very closely.” It is evident that the dramatic flux of gas prices is definitely in the public eye, but there is only so much that can be done aside from fighting for refineries to stay open; so more than anything, this is an unfortunate game of wait-and-see.
“Lundberg in CSPNet.com.” Lundberg Survey. 4/23/2012. Web. 5/4/2012.
Rapier, Robert. “Refinery Closures Lead to Rising Gas Prices and Job Losses.” Consumer Energy Report. 1/31/2012. Web. 5/5/2012.
“Rising Fuel Prices Top Story For Public.” Pew Research Center. 3/21/2012. Web. 5/4/2012.