General Question

XCNuse's avatar

Why do gas prices honestly keep rising?

Asked by XCNuse (1192points) May 14th, 2008

My question is why does it keep going up, there is no “shortage” honestly, if you actually do your research people just say that for a reason to get everyone to believe thats why prices are going up, there is no shortage at all… whats with the prices?!

Observing members: 0 Composing members: 0

23 Answers

jcs007's avatar

conspiracy?

Dog's avatar

There are a lot of reasons- here are just a few:

1. We (the USA) do not have enough working refineries to keep up with demand.
2. Fuel emission standards are very high and processing the gas to these levels costs more.
3. Taxes on Gas are excessive.
4. Supply and Demand.
5. And of course the fact that they can raise the prices and we really cannot do anything about it aside of riding a bike.

SquirrelEStuff's avatar

It is the devaluing of the dollar. The Federal Reserve has been printing so much money to keep up with our goverements spending habits. All the trillions of dollars that Bush has needed, had been printed out of thin air. This new money devalues the money currently in circulation. Since this money goes to certain special interests first, they get to spend the new money, causing demand to go up, prices rise, our wages haven’t risen yet, we pay more for goods with less money in our pocket. Funny that oil has tripled, yet so has gold. Which means if we were on the gold standard, gas would still be the same price. Rob Paul talks about It in his new book, The Revolution: A Manifesto. This man speaks the truth. You won’t hear this stuff from Obama or McCain. Everything the corporate media is telling us is a smokescreen. But really, we are so dependent on oil and traveling so much for work, the oil companies can charge whatever they damn please. Americans have no backbone anymore to fight back. People can’t afford to not go to work.

jcs007's avatar

@chris: How does the devaluing dollar relate to gas prices soaring in other parts of the world?

marinelife's avatar

Many large financial entities have begun trading in oil commodities including a huge investment entity, the California Pension Board. This increased speculation has increased prices. You are right about no shortage. Remember the power price run-up when Enron began speculating?

Here’s a pretty good analysis from Business Week: http://www.businessweek.com/lifestyle/content/may2008/bw20080513_720178.htm?chan=autos_autos+—+lifestyle+subindex+page_top+stories

SquirrelEStuff's avatar

The global economy is dependent on the dollar also. Our inflation effects other countries because of the reserves they hold of dollars.

Economists in a Reuters survey expect a median 0.3 percent gain in the CPI and an annual rise of 2.4 percent in core CPI, excluding food and energy items. Both comments suggested that the Fed is unlikely to cut interest rates again next month.

So while we are being told that inflation is not bad, the measurement of inflation(CPI), does not include food or energy, the two necessities that we use and need most.

Response moderated
xyzzy's avatar

@jcs007, The petrodollar is the reserve currency of the world. When we have problems, everybody feels it.

@chris6137, right idea wrong reason. The FED cannot print money, only the treasury can. And if they did that, the dollar would tank overnight. Things are a mess now because nobody trusts anyone anymore; nobody knows the true value of an investment anymore. Too many people telling too many lies about what they were peddling has caused critical damage to our economy.

Money was created out of thin air, but by the banks. They took on unsound loans and the repackaged and sold them off as AAA rated securities (the safest investment you can buy). The lie is maintained to this day out of fear of crashing the economy.

But everyone knows we’re lying. Foreigners see this as increased risk for US investments and are thus demanding more compensation for the increased risk, which translates to the dollar losing ground against other currencies. And as the dollar loses value, the cost of importing things like oil goes up.

Other countries are losing faith on our economy and rightly so. And until we stop lying to the world, they will continue to lose faith. It’s really as simple as that.

marinelife's avatar

@chris6137 printing out of thin air? HUH?

SquirrelEStuff's avatar

@xyzzy

The banks print the money depending on the interest rate set by the fed though, no?

xxporkxsodaxx's avatar

Well considering that in the first quarter the year Shell and BP made 17 BILLION in REVENUES and 120 BILLION in profits just last year. This is why Congress is taking them to federal court because when they exceed every other major resource group in America, something has to be up. They are obviously over charging for every gallon they sell, recently I think that they know they have been found out and they are raising them as much as they can to fill their greedy pockets before they are forced to stop. I think that they are using the war as an excuse to raise prices and because it has been a common answer to they question and so people just stopped asking and started complaining instead. Now of course the dollar is decreasing in value from over printing, but its only part of the puzzle. What I really wish is that some rich billionaire would come along and start charging gas at reasonable prices again and would run all of the other oil companies out of business, someone call Warren Buffet.

LunaFemme's avatar

don’t forget to add into the equation that we now have to compete with China & India when purchasing our oil. I think the US is still one of the largest consumers of oil but we won’t be for long if India & China keep growing as fast as they are.

I think a lot of this boils down to the need for the US to loose its dependency on foreign oil.

xxporkxsodaxx's avatar

Yea I agree, also if we were able to research oil drilling in extreme cold, we could harvest the oil in Siberia and I heard somewhere that Siberia has about as much oil as the middle east, but then again it’s only what I heard.

xyzzy's avatar

The banks “print money” through a process called Fractional Reserve Lending. The FED rates are all about how much interest it costs for banks to lend to each other or to/from the FED. That doesn’t really touch on what I was talking about, so I won’t bother explaining it.

wildflower's avatar

http://en.wikipedia.org/wiki/Oil_price_increases_of_2004–2006

And if you think the prices are bad on your side of the pond, try paying 40+ USD to fill up a Ford fiesta…....

nocountry2's avatar

The environmentalists are secretly in cahoots with Big Oil.

LunaFemme's avatar

Believe it or not, I just paid over $40 to fill my Mazda Miata. But this is San Diego & my car takes premium. And, yes my car only holds like 12 gallons!!

cakmon's avatar

The answers to these questions above are just the regurgitated media perception that is being fed to the general public. Supply and Demand? Yeah right. OPEC has been saying for months even years that they are meeting supply requirements easily. Even with the demand of China and India. Recent reports have said that China’a growth may have been overestimated by 40%. So that is false.

Oil companies having high profits and saying “oh we need it (the profits) for reinvestment and future infastructure”. False also. They are paying out huge dividends to shareholders in the meantime because they currently have more money than they know what to do with. They have invested a mere portion of their profits on future expansion into alternative markets. My father has been in the oil industry for 30 years on the wholesale side. Oil companies only made a few cents on the gallon margin. And this margin should not change by huge amounts as it has in recent years. Figure if they make the same margin then their profits would be relatively the same as five years ago. Think about it. If they are paying more they would charge more but the margin should be the same. They are bilking the public for billions of dollars and we are currently standing by and just complaining uselessly. They will wait out our puny little complaints until we start accepting higher fuel prices as we have been. Now we look around and get all giddy when the gas price drops 5 cents to $3.65. 7 years ago, We would have had heart attacks at $2 per gallon. This is all a big charade that hopefully someone will pull the curtain back on and regain some of those windfall profits that are being stolen at the public expense. We need to start really losing our dependency on foreign oil and we need to start looking at all the presumed freedom to buy a huge gas guzzling vehicle because we are free Americans. Get over it. The earth will take it all back when it is ready. Humans only hope that they will be able to survive. Karma is a bitch.

nocountry2's avatar

cakmon…I like your style.

thetypicalusername's avatar

I rode the bus for 2 years due to a car accident and in the beginning I thought…hey, at least I’m making a small difference right? But in the end…I couldn’t take it anymore. The buses started piling up with dirty bums, gum, disgusting trash, gross people. Ugh…

MisterBlueSky85's avatar

way to go cakmon. makes me want to yell “I’m mad as hell, and I’m not gonna take it anymore!”

Noel_S_Leitmotiv's avatar

GA @dog, its nice to hear someone give the real reasons instead of the usual idiotic bitching that the gas companies conspire to oppress us with fixed high prices.

Fucking taxes, its out of control.

Response moderated

Answer this question

Login

or

Join

to answer.

This question is in the General Section. Responses must be helpful and on-topic.

Your answer will be saved while you login or join.

Have a question? Ask Fluther!

What do you know more about?
or
Knowledge Networking @ Fluther