Why are gas prices so high?
Gasoline prices are all time high in the United States today. Although the price paid nothing compared to the prices in some other countries around the world, it can not seriously argue that the price we pay at the pump in the United States today is a bargain.
In recent times the price of gas hovered around $ 3.20, $ 3.30 per gallon. We must be able to argue that the price is not high all the time taking into account inflation, the development of prices is based. It 'true that inPart of the 50, 60 and 70, gasoline prices exceeding $ 3.00 per gallon, when adjusting the dollar for inflation.
E 'on an all time high
However, at $ 3.80 per gallon, we've broken through this threshold. Now, of course, gasoline at the pumps, we buy today is a mixture of much more expensive than those who bought what at the pump in the '50 's, 60 and 70. That's because the gasoline we buy today has come true for much more stringent environmental standards, and this pushes the priceon.
However, the price of gas is high, even if only a few years ago, and this raises the question why the comparison? In this article we will explain why we do what we pay today for gasoline. First, we start with what the reason is not.
Evil Big Oil
As high gasoline prices will help oil companies? There is no logic to believe so. If there is only one oil company, which would have been different, but there are a lot of oil companies. Everyone in the competition againstother. If a company can sell at least this company. Will gain a greater share of the market and earn more. Raising prices, companies have market prices. It makes no sense!
Moreover, while prices are so high, alternative fuels more viable and relatively inexpensive. Is what the gas companies want? We're looking to find themselves out of business? Blaming oil companies is a simple and convenient answer for our problem, butis not logical.
Economics 101: supply and demand
Every capitalist economy depends on to define the law of supply and demand, prices. Prices are, as a commodity, and because demand is not for this product is based. In recent years, China and India are big buyers of oil. Since the supply of oil has not increased, the price is obviously increased. If people in China still with rickshaws for transport, perhaps we would nothave this problem.
Normally, if making a product with growing demand, the largest number of suppliers of such products in order to gain greater market share. American oil companies are not allowed to do so. There have been no new refineries have been built in the United States since 1967, and American oil companies are not allowed in the Gulf of Mexico, the Mexican companies are drilling.
For the past few years have caused some people, George W. Bush as one, for the drillingOil in the ANWAR region of Alaska. Certainly, if we are drilling for oil would increase supply of oil.
A bill Republican, has led to call for drilling in ANWAR was proposed in 1994 by President Clinton put his veto. Some say it is a real Saudi Arabia in this region if this is true, and this law has not been vetoed, of course, we would more than meet the basic offering of our consumption of oil today. This bit of money does not occur.
MarketVolatility
In two problems is the increasing oil demand and supply, environmentalists banning the way, also, the problem is the volatility of the markets. Under capitalism, the commodity prices swing wildly up and down. An example would be the recent housing boom. In 2005-2006, housing prices were very high, a lot of people, the prices were really untouchable. It 'was at that moment he began to ask the experts as to when the real estate sector is? Bursting
Been asked this question because it was not obvious, house prices continue to rise forever. He must be a point where nobody is in a position that could afford homes if they were shooting upward. The experts were right. The bubble burst and home prices plummeted.
We can also look back at the tech stock boom of the '90s. At one point was listed on the Nasdaq over 5,000. At that time, many analysts were telling us to keepThe purchase of these stocks as the Nasdaq went higher. However, there was a time when the NASDAQ was no longer a bargain and the price fell, up to 900 people. Obviously, the Nasdaq is overbought and could not sustain trading at such high numbers.
It is currently impossible, what is happening in the oil market and not see the similarities between the housing bubble of 2006-2005 and the boom in the Nasdaq late 90s for research. Itis very probable crude oil is now very overbought and also collapsed.
However, currently stuck with high oil prices were, and if the politicians that we will never be oil independent, there are many of us who believe that we are always under pressure from high oil prices, unless we begin our drilling .