What is the answer to the rising US cost of fuel/gas with no apparent shortage to account for it?

Question

What is the answer to the rising US cost of fuel/gas with no apparent shortage to account for it? Please, no "if you think it's bad in the US, try going to _______" . Not trying to be rude but I really am not worried about how much fuel would cost me in other countries, my family and I live and try to make it Day-to-Day in the US so that comparison really isn't relevant. I just feel the people of this country are getting used by ???? with no apparent control over how much gas will cost. It really doesn't seem to be market driven anylonger (if ever)!

Answer 1

republican greed...its as simple as that

Answer 2

Fuel prices are market driven.   Any price that isn't controlled by some external force is market driven.  The market is changing, that's the catch.  The US has been and remains the largest consumer of gasoline in the world.  China and India are both experiencing double digit growth in petroleum demand, which is impacting the gloabl market for petroleum.

Gasoline is refined from crude oil, as we all know.  When you see a price for crude oil on the news, it's a benchmark price, typically either WTI (West Texas Intermediate) or Brent crude oil prices.  Why these prices?  Because WTI is the best oil in the world for producing gasoline, because it's lighter (less heavy gunk) and sweeter (less sulfur to refine out), with Brent a close second.  These represent the highest cost flavors of crude in the world.

Other crudes cost less because of their relative heaviness and "sourness" to WTI.  These produce less gasoline and are more costly to refine, increasing the cost to match WTI.  The break in price happens to match the additional refining cost.  So we're no better off than when we started.  

There's no shortage of oil in the US.  Refineries don't just refine gasoline, they refine diesel fuel, home heating oil, jet fuel, chemical feedstocks, hundreds of petroleum derived products.  As we demand more of each, straining the already overburdened refining network in the US, we make the value of refinery time that much greater, increasing production costs again.

EDIT:  To answer the refinery issue brought up by another responder, it takes at least 10 years to bring a refinery from planning to turnkey.  Billions of dollars have to be invested in a project that could fall flat on its face before it opens.  Look at the ethanol situation.  Plants were springing up all over the Midwest, now they're idle and planned refineries are on hold.  Towns that put all their eggs on the ethanol bandwagon are worse off than they were 5 years ago.  Several refineries are undergoing expansions, my company has one started that will double the capacity, but it won't be ready for 6-7 years.

Answer 3

Economics 101.

Supply stays the same while demand increases = rising prices.

You may not be interested in what gas prices are in other countries, however, what happens in other countries affects gas prices here at home.  Oil has a global market, so when demand increases worldwide, that affects the prices everywhere.  Right now the two largest countries in the world have economies that are growing by leaps and bounds.  China & India are modernizing, and more of their citizens are driving automobiles now.  This increases the world wide demand for oil.  With very little change in supply, this raises the price of gas for everyone across the globe.

Answer 4

Price is determined by supply and demand.  There is no shortage, but there is rising demand, mostly from newly industrializing countries like China and India.  Considering how big these countries are, even a small increase in demand there will drive up the world prices.

Answer 5

I just read today that worldwide demand is increasing daily from especially China, India, and lots of other parts of the world, even Vietnam is becoming more motorized as people are being allowed to open businesses.

Also, the fear that the U,S. may start some conflict with Iran is causing some price rises.

Mr Bush has nothing to do with this, but lots of people want to blame him for everything.

Answer 6

The answer is still supply. We don't have a shortage of crude oil, we have a shortage of refinery ccapacity. We are running at 100% capacity. We could buy more crude oil but we cannot refine it. Oil could drop in price back down to $50 a barrel and we still won't see a drop in price at the pump. We are consumers of fuel, not crude oil. When we buy a car we are not concerned about the price of steel. We are just concerned about the price of the final product, the price that we pay as consumers. So to fix the problem we need more refineries to make more fuel so with increased supply and competition the price will drop.

The oil companies have no incentive to do this because the government has made it impossible to build new refineries and they are making large profits on the small supply,large demand business model. So until it changes, happy motoring!

Answer 7

I think when there is a threat of war such as Iran that it goes up.  Also It does have a little something to do with the stock market. also refinery  costs

Answer 8

Ask George Bush!  He seems to know everything.

Answer 9

OPEC Greed

Ahad the Arab wants to get his cut at any cost.