Gas Prices - Why are they so high?
Why do gas prices continue to rise? It’s amazing to think that just a few years ago, we were paying over a dollar less for a gallon than what we are paying today. What is causing this?
Crude oil accounts for about seventeen percent of the energy that is consumed in America. The main use for gasoline is for automobiles, trucks, boats, and various pieces of farm equipment. Gasoline is usually produced all year round and most of the time, extra volumes are produced for the busy summer vacation season. It comes from oil refineries through pipelines and is made available in retail stations across the United States. There are three grades of fuel: regular, mid-grade and premium and each of these grades have a different octane level. Gas prices usually vary according to their grade but generally that’s a consistent difference.
So why now are gas prices rising out of control? Since the beginning of 2005, gas prices have been on an increase. They price of crude oil started around forty two dollars a barrel and reached an all time high of seventy dollars per barrel in September. When Hurricane Katrina hit, this had an extremely devastating impact on the gasoline markets in the United States because it initially took out more than twenty five percent of the crude oil production in the United States. On top of this, there were major pipelines that are the main producers in the Midwest and on the East Coast from the Gulf of Mexico that had no choice but to shut down or operate at a very reduced speed for a pretty significant time. This was primarily responsible for causing gas prices to shoot up dramatically.
Why do gas prices seem to fluctuate as quick as they do? Normally, there are always fluctuations depending on the time of season and also because of competition between stations. They can also change due to crude oil supply disruptions that are caused from world events or pipeline outages.
You will always find that gas prices sometimes have a major difference depending on what region of the United States they’re in. This is primarily due to proximity of supply, supply disruptions and of course, competition in the local market. The highest gas prices are found on the West Coast, the Rocky Mountains, the Central Atlantic and the New England area.
So… the next time you’re at your favorite local BP, Citgo, Turkey Hill, Getty, Sunoco, Costco, Exxon or Mobil on your local highway, or ave, you’ll have a better understanding as to why you’re paying what you’re paying. You can find more of the latest info on the www if you search for high gas prices.