Gas prices have been on a rapid rise the last few years and not many people are happy with it. It limits those on a budget for how much they can do and how much they are willing to drive. Lately, gas prices have been fluctuating in price and going up but are more recently going back down, which gives people a little more flexibility at times in their schedule. It lets people do things such as travel and more, that they were not able to do last summer when gas prices were right around as well as over $4.00 a gallon, which made people cut back on those unimportant things. Supply and demand plays two major factors that have an impact on what we might see gas prices at.
Ash says, “Gas prices are expected to continue to drop leading to Election Day and continue to fall through the end of the year (Richardson, 2012).” According to Clifford Krauss, oil experts have been talking about how since Israel and Gaza are not oil-producing areas, that we should not see oil prices spike up and cause us to pay more for a gallon of gas (Krauss, 2012). As gas prices have been steadily increasing, it has had a negative effect on the consumers that use it daily.
According to Jim Motavalli, “the main five reasons as to why gas prices have been on the steady rise can be related to demand, global politics, speculation, seasonal, and fuel-efficient cars (Motavalli, 2012).” The seasonal reason really gets to everyone who drives, because gas prices increase in the summer that causes less travel. People do not like entering a new year with record high gas prices since it scares them.
Demand and global politics are the two reasons we as people should be the most worried about, because if demand were to decrease then we would see gas prices take a giant leap that would cause people to travel less yet again. Over the past two years, more and more fuel-efficient cars have been produced and that leads to people buying them to save money.
What those people do not know is since they do not use gas that often, it causes gas prices to increase that hurts us drivers as more and more people are buying them. Also, since electric cars, of course, do not use gas at all, which is why some states are talking about alternative taxing schemes for them (Motavalli, 2012). If more and more fuel-efficient cars are going to be on the road, it is going to hurt those people who drive trucks the worst because they dislike the fact of seeing gas prices on the rise all the time. “Analysts warn that oil could become even more expensive in the second half of the year as supplies struggle to catch up with rising demand” (Motavalli, 2012).
Along with this comes the use of gas for those who use it daily. On a daily basis people are driving from home to work, home to school, home to the grocery store, home to the gas station and many more. For some people they have cut back on some of that and invested in public transportation, which does save them a little bit of money that they can spend at anytime on gas. With the decrease in oil lately, we are going to see substantially lower gas prices, which is going to help every driver out on a daily basis.
“The average price Chevron realized for a barrel of oil in the United States dropped to $95.44 in July and August, compared with $103.91 in the quarter from April through June (The Associated Press, 2012).
With the way gas prices have been lately, it makes the consumer consider whether or not to believe that gas may rise or fall, which changes a lot of things for those who drive. Robert Rapier says, “U.S. gasoline prices have been on the rise for the past two months - and are presently $0.15 per gallon higher than they were a year ago – I expect that gasoline prices will fall rapidly in the weeks ahead.
There are four reasons for this” (Rapier, 2012). In a later article, according to Reuters, gas prices continue to rise, lifting consumer spending in August. It is scary what everyone can find online as well as in a newspaper to read about the same topic, which makes it hard to believe one article to the other. Gas prices are one of those things that many people are not going to understand due to how much prices fluctuate.
Going back to Robert Rapiers article, he states that there are reasons as to why gas prices will fall rapidly in the weeks ahead and those reasons are: Hurricane Isaac causes oil prices to increase for a short time, but those oil companies that were located where the hurricane hit will be back shortly due to the small amount of damage. Also, summer causes the demand for the price of gas to increase but now that the summer is over, the demand is not so high and consumers will see gas prices become lower. These are two important reasons as to why gas prices are decreasing, since drivers usually see gas prices increase after a hurricane, which may be because those states are huge gas providers for other states.
There are many different ways in which drivers can help save money, as stated earlier. Public transportation has become more popular for those that want to save money. When people drive fuel-efficient or electric cars, it drives the price of gas up for those who do not drive fuel-efficient or electric cars. A recommendation would be for those people to not drive fuel-efficient and electric cars, so therefore we are not seeing gas prices constantly rising and seeing consumers very disappointed with how much they have to budget for gas. “America is giving more people access to public transportation” (Hargreaves, 2012).
In the past few years, gas prices have been increasing so much, which is making motorists think of ways to save money and limit their gas use on a daily to weekly basis. By speeding, drivers who drive gas-guzzling vehicles cause a decrease in miles per gallon that the vehicle in which is being driven are capable of getting. In order to get more miles per gallon, keep the car being driven at a constant speed and use cruise control when appropriate. By doing so, keeping a constant speed allows the miles per gallon to be constant and not plummet all the time.
Also, by keeping up with the maintenance on the vehicle as well as checking to make sure the tires are inflated properly saves money overtime that could be put in your gas tank. Everyone wants to save money at the pump and get more miles per gallon each and every time they fill up so they do not have to fill up as often. Not many people have been wanting to travel around the holiday times due to the increase in gas prices, but learning how to get more miles per gallon could help you make your holiday trip to see family or just a family vacation more affordable and not ruin your bank account.
To conclude, the price of gasoline has witnessed a steep increase in a few short years. In 2004 gas prices reached a market high of two dollars per gallon, doubling the rate of one dollar a gallon it was selling for just six years earlier. “National prices have dropped another seven cents over the last two weeks and more than thirty six cents over the past six weeks (ABC News).
Although not every state has the same gas prices, some are higher while some are lower. This is due to the demand in certain states such as California, New York and Illinois. “Forty-six percent of 18-24 year-olds would choose Internet access over owning a car, according to a recent Deloitte study” (Hargreaves, 2012). This is evident in the states that have cities with a large population of 18-24 year olds in a metropolitan area. Also, this younger age group will be the determining factor of how much gas will be used, which determines the price of gas.
References The Associated Press. (2012, October 9). Chevron Cuts Its Forecast for 3rd-Quarter Earnings. The New York Times. The reasoning behind why Chevron has a lower 3rd quarter earnings. Cobb, K. (2012, November 23). Did oil decide the last three American elections? The Christian Science Monitor. How politics has been affecting the price of gas and oil.
Hargreaves, S. (2012, September 17). Young Americans ditch the car. Retrieved December 17, 2012, from CNN Money website: http://money.cnn.com/2012/09/17/news/economy/young-buying-cars/index.html All about the change of how many people use cars and how they are going about it. Hicks, J. (2012, March 3). The claim that won’t die: Did Obama want higher gas prices? The Washington Post. Is Obama the main reason why gas prices are going up, or is there something else causing it that people do not actually know about. Holiday travel made easier with falling gas prices. (N.d.).
Retrieved December 6, 2012, from ABC News website: http://www.abcnews4.com/story/20136533/holiday-travel-made-easier-with-falling-gas-prices About how during the holidays we should expect to see lower gas prices over for many states. Krauss, C. (2012, November 21). Oil Prices Stay Steady Despite Mideast Conflict. The New York Times. Conflict has stopped a bit in the Middle East, which caused people to not have to worry about pain at the pump for a few days over Thanksgiving. Motavalli, J. (2012, March 3). Five Reasons Gas Prices Rise. Forbes. An article based on the top 5 reasons why gas prices rise.
Oil prices fall on Greek bailout doubt. (2012, November 28). Retrieved November 28, 2012, from Sky News website: http://www.skynews.com.au/businessnews/article.aspx?id=820981 An article based on who is going to help with the new oil bailout. Rapier, R. (2012, September 10). Four reasons gas prices are about to fall fast. The Christian Science Monitor. Gas prices are set to decline and this article explains some reasoning why that is about to happen. Reuters. (2012, September 28). Gas Prices Continue To Rise, Lifting Consumer Spending In August. The Huffington Post. How the increase in gas prices is causing consumers to spend more money.