Can anyone tell me why gas is so expensive?
Apr 23rd 2008, 3:13 pm
#31
Septicity
Joined: May 2004
Posts: 23,762
Re: Can anyone tell me why gas is so expensive?
One thing not yet mentioned as causing weird spikes in gas prices in the US is the lack of domestic refining capacity.
Apr 23rd 2008, 3:49 pm
#32
Forum Regular
Joined: Aug 2006
Location: Manchester ---> Chicago
Posts: 54
Re: Can anyone tell me why gas is so expensive?
Hopefully the price of oil will get people driving reasonably sized cars like most of the rest of the world (does anyone really need a Hummer!), and the environment may benefit as a result.
:curse:
Apr 23rd 2008, 3:53 pm
#33
BE Forum Addict
Thread Starter
Joined: Oct 2005
Location: TN
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Re: Can anyone tell me why gas is so expensive?
i completely agree with that... but for the rest of us driving 30-35 mpg cars and its now costing $60-$70 to fill up twice a week (up from $35-$40 a year ago) its still a big pinch!
Apr 23rd 2008, 3:57 pm
#34
Bloody Yank
Joined: Oct 2005
Location: USA! USA!
Posts: 4,186
Re: Can anyone tell me why gas is so expensive?
The short answer: Gas is expensive because oil is almost $120/bbl. When the cost of the input goes up, the cost of the output will typically increase along with it, particularly if supplies are tight as they are now.
A very good and insightful reply.
One of the reasons that the US seems to suffer higher increases in gas prices during periods of high crude prices, is that pretty much all of the price that is paid at the pump is the raw material cost, with very little being due to taxation. In contrast to, say the UK, where a large percentage of what is paid at the pump is taxation. Therefore a spike in the cost of the raw material will have a bigger impact on overall price at the pump in the US than it will in the UK, for example.
Apr 23rd 2008, 4:01 pm
#35
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Re: Can anyone tell me why gas is so expensive?
i know that... but why is it $120/bbl
Apr 23rd 2008, 4:07 pm
#36
Forum Regular
Joined: Mar 2007
Location: Texas
Posts: 130
Re: Can anyone tell me why gas is so expensive?
As a finite resourse dwindles, generally the cost goes up.
When demand outstrips supply, generally the cost goes up.
There's little to none of the "easy oil" left. What's left is extremely difficult/expensive to exploit, being in remote/deep-water locations.
Just a couple of reasons.
When demand outstrips supply, generally the cost goes up.
There's little to none of the "easy oil" left. What's left is extremely difficult/expensive to exploit, being in remote/deep-water locations.
Just a couple of reasons.
Apr 23rd 2008, 4:10 pm
#37
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Thread Starter
Joined: Oct 2005
Location: TN
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Re: Can anyone tell me why gas is so expensive?
As a finite resourse dwindles, generally the cost goes up.
When demand outstrips supply, generally the cost goes up.
There's little to none of the "easy oil" left. What's left is extremely difficult/expensive to exploit, being in remote/deep-water locations.
Just a couple of reasons.
When demand outstrips supply, generally the cost goes up.
There's little to none of the "easy oil" left. What's left is extremely difficult/expensive to exploit, being in remote/deep-water locations.
Just a couple of reasons.
no way!
Apr 23rd 2008, 4:27 pm
#40
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Re: Can anyone tell me why gas is so expensive?
now this is what i agree with. I just dont buy into the Asian markets increase has had that much effect in the last 3 weeks
Apr 23rd 2008, 4:29 pm
#41
And YOU'RE paying for it!
Joined: May 2007
Location: kipper tie?
Posts: 2,328
Re: Can anyone tell me why gas is so expensive?
The economy (and zoning, and new development) has been built on a foundation of straw. When you're excessively dependent on one cheap input, you're susceptible to external shock. Politicians are talking about this as if it were unprecedented or completely unforeseeable, but it's day 2 of an economics course. (Day 1 is usually spent registering and finding classrooms).
Apr 23rd 2008, 4:34 pm
#42
Lost in BE Cyberspace
Joined: Jan 2006
Location: San Francisco
Posts: 12,865
Re: Can anyone tell me why gas is so expensive?
I'm not holding my breath. The number one complaint of new Hummer owners is... low gas mileage. If they couldn't figure that out before they bought, what hope is there?
Apr 23rd 2008, 4:35 pm
#43
Bloody Yank
Joined: Oct 2005
Location: USA! USA!
Posts: 4,186
Re: Can anyone tell me why gas is so expensive?
In my opinion, the price of oil would be $60-70/bbl if the war would be ended. I am going to guess that about $20 of it is due to the weak dollar (which is a byproduct of the budget deficit, which leads back to the Iraq war), and that anything above that is due to speculation (which is also symptomatic of the Iraq war.) If we could begin the withdrawal process, I would imagine that gas would end up back in the $2-2.50 range within several months.
Apr 23rd 2008, 4:35 pm
#44
Peace onion
Joined: Jul 2006
Location: Denver
Posts: 5,686
Re: Can anyone tell me why gas is so expensive?
The economy (and zoning, and new development) has been built on a foundation of straw. When you're excessively dependent on one cheap input, you're susceptible to external shock. Politicians are talking about this as if it were unprecedented or completely unforeseeable, but it's day 2 of an economics course. (Day 1 is usually spent registering and finding classrooms).
Apr 23rd 2008, 4:36 pm
#45
Lost in BE Cyberspace
Joined: Jan 2006
Location: San Francisco
Posts: 12,865
Re: Can anyone tell me why gas is so expensive?
The economy (and zoning, and new development) has been built on a foundation of straw. When you're excessively dependent on one cheap input, you're susceptible to external shock. Politicians are talking about this as if it were unprecedented or completely unforeseeable, but it's day 2 of an economics course. (Day 1 is usually spent registering and finding classrooms).