KENTUCKY (4/2/2012)-With the economic state of the country being what it is, it comes as little surprise to see gas prices rises to such high numbers. One might be surprised, however, in finding out the actual reasons for the recent rise in gas prices.
One of the main reasons that gas prices are currently so high is the system of refining the substance from crude oil. The main difference between the United States way of looking at gas and foreign policies is the exporting. America always exports its fuel already in gas form, in order to make a much higher profit. Whereas other nations usually exports while it is still oil, in order to save time on the refining process. This means that the United States has to refine almost all oil it gets into gas in order to be used as fuel.
Another very important factor is the simple fact that gasoline is an industry. It cannot be sold at wholesale price to the individuals while the companies still make a profit. The cost of gas rises as gas becomes more uncommon, in order to still be profitable. However, the price very rarely goes down, even when more oil is found. Some say that this is because the companies are cautious to take prices down, trying to make sure that they won’t lose money in the long run instead of make it.
Government taxes also influence the price of gas. This comes as no surprise, with the aforementioned economic issues. Surprisingly, little gas tax comes from the federal taxes. With an average gas tax of 48.8 cents, only 18.4 cents is federal. The rest goes to state and local government organizations.
Global politics has a heavy influence on the price of gas. This might very well be one of the main reasons that the price of gas continues to rise, no matter the rarity of the fuel. Mostly, it works like any other business. If gas is more difficult to obtain, then it costs more, so it comes as no surprise that when there is a chance of a petroleum filled nation breaking relations off with the United States, the price of gas could very well go up.
With the price of gas currently on the rise, the end appears to be rapidly approaching, and while this might look bleak for the American people, the rising prices could help us in the long run. If we were to find a large deposit of oil, it could create an extreme amount of revenue for the United States.
Dylan M. Graham
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