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dreamer31's avatar

Are we paying for the oil spill now?

Asked by dreamer31 (1932points) February 19th, 2011

I have found that recently where I live, the gas prices have went up a few cents everyday like we are dumb and don’t notice it. The gas prices a few years ago had alot to do with the economy’s fall just my opinion and now even after so many jobs were lost and the negative impact it had and is still having, the price continues to go up.
So my question is, are we once again as the people paying for a mistake that we had nothing to do with? And if not, why does the price continue to go up?

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6 Answers

Mamradpivo's avatar

I’m sure we are, but gas prices will simply continue to rise here and everywhere as global demand increases. Every day, hundreds of thousands of people buy their first car or motorbike, and oil is a global commodity, so that will impact the price.

Personally, I think gas in the US is way too cheap compared to the actual cost of fueling our vehicles.

Lightlyseared's avatar

No. You’re more likely paying for the riots in Egypt. 3 million barrells of oil go throught the suez canal each day headed for the US which was probably interupted some what as the entire country took the month off.

zenvelo's avatar

@Mamradpivo has touched on an important point. As the world economy recovers, energy demand is going up.

Gasoline demand in the US is relatively inelastic, it has to increase significantly to drop demand. So the oil companies know they can raise prices somewhat without much more than grumbling. And just the mere threat of “uncertainty” in the Middle East has allowed them to raise prices without begging suspicions.

I like the idea of Car Talk on NPR – let the Treasury gain the windfall instead of the oil companies. Add 50 cents per gallon tax every six months until there is an added $3 per gallon. It cuts the deficit and gets people to stop driving as much.

marinelife's avatar

Much of it is the increase in oil prices doe to the instability in the Middle East.

incendiary_dan's avatar

In addition to what was said about Egypt, there’s also the fact that we’re now certain that Saudi Arabia has been overstating its reserves of oil. They’re likely past the point of diminishing returns, and along with other nations having reduced production, likely point to the peak of global oil supplies. Read up on Peak Oil; it could be helpful in understanding what this means.

filmfann's avatar

Things are likely to get worse with chaos in Libya. While we didn’t get oil from them, other countries did, and they will now begin to bid against us for the oil we get.

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