Who determines how high the gas prices get?

Question

if they went up to $7-8 a gallon the president could do something right?

Answer 1

I am buying a horse and buggy.

Answer 2

Supply and demand.

Answer 3

Well, oil companies play major role in oil prices based on the supply and demand of oil. But in many countries, their governments fix the maximum price. If the oil prices go up beyond the fixed maximum price, then the government pays the difference to the oil suppliers. (called subsidies). I recently read an article on BBC website on this issue. Here is the link:

http://news.bbc.co.uk/2/hi/business/7255...

You will see more interesting articles listed on the right.

Answer 4

Ultimately the answer is a limited yes - there is a large amount of oil held in the Strategic Oil Reserve that could increase the supply side of supply vs. demand. However, there are national security issues involved in doing that. The reserve is also a limited amount of oil, so if it was used there would not be any more control the President would have.

As a person who does a lot of investing, gas will never be "cheap" again. My logic is that even if car manufacturers increase the mpg on new vehicles there are already so many low mpg cars/trucks/SUVs on the road it would take many years before the demand side of the equation would die down. China, India, and other devoloping nations want their vehicles too.

If you are asking because you are thinking about buying a new car, the financinal answer is to get the highest mpg available in your price range. Not only will it save you money on gas but your resale value will be far greater in the days of $6+ gas.

Answer 5

OPEC needs to be bought down- While Canada is the biggest single "Seller" of Crude oil to the USA representing around 5% of consumption- It's the OPEC Cartel  that is the biggest  single united producer, followed by the Persians-

It's all about Economics and Greed , and a lot less to do with "Supply and Demand"- Don't  blame  the refineries selling such Gasoline, they have the right to sustain profits now  in the same way they did in the "Good times" or mitgate losses by increasing the value of goods which are easier to produce, than those goods which are not -  

Don't blame Government taxes either - Such taxes are collected to contribute towards buidling road infrastructure in turn contributing to the welfare and indeed safety of the citizens  who ultimately pay such taxes every time they fill up- As for the excuse that "Price Parity" is the reason on why such taxes are needed on crude oil - is  a lame  excuse suited for times gone by, and not today.

"Demand" was always assumed to be  a rising constant- While "Supply"  was always applied as a variable application-( Something the much lauded  "Hubbard's curve"  didn't  account for) OPEC increases production  , OPEC decreases production, throw in a Hurricane here and there-and bingo! prices surge overnight- every now and then we get some releif- but overall such prices always head skywards-

Not so - ? Then why is Diesel fuel  an easier product to refine and produce than Gasoline and yet Diesel is now surpassing the price of Gasoline-?

OPEC restricting supply , when supply is needed the most- Such nonsense  alone speaks for it self- "Close the tap, and increase cash flow", "Open the tap and  less cash flow is eaned , for a short time" - while all the time the price is simply climbing , into outer space-

Remember the Foolish Coyote on the "Bugs Bunny " show- He could never catch the Road Runner - for all his efforts- the Road Runner always came infront-

We are all  "Suckers" just like the Coyote- and the "Road Runner" is OPEC- specificaly, Saudi Arabia- Get rid of Saudi Arabia from the OPEC Cartel - and bye-bye  OPEC-  Hello real competition!  Watch how much crude oil becomes availble overnight-  Watch the price of Gasoline  tumble to rock bottom- along with other products dependent on delivery via   gasoline use-

Watch inflation drop-

The actual cost of   Wages in the  production of extracting crude oil did not rise overnight? Strange to think that the only factor which is always so slow to rise and  when it does,  often so small- are workers  personal weekly pay checks - Let's insist that wages rise up and down on a weekly basis the same as the price of  Bread, Milk and Gasoline does -and the problem would be solved- but that's not going to happen is it?

Can the Government do anything to assit us in our times of need-It sure can-

How about  we all scream and shout  in demanding that the Government give us all  2  or three times a year grace on fuel taxes being collected at the pump,  in  where for certain "No Tax Fuel Days"- we can all fill up our tanks  in where such  taxes are exempt or heavily reduced for that particular week- think about it,   no taxes on fuel , lets say at start of summer holidays, will  increase  in boosting the economy of local tourist areas- where taxes are lost on  "No Tax Fuel Days", gains are made in employment and services in other areas  which would have otherwise suffered a massive decline of vistors- More taxes are paid on such increases in local tourism- providing a "win, win" situation all around- Simply increasing the potential in allowing local tourism to increase instead of decline  because of the prohibitive cost of driving a few hours to such  once thriving  destinations, could be the "Silver bullet" , the govenment needs  to really help its citizens to ease the burden in some part, of rising fuel costs-

Local economies get much needed boosting- Drivers getting fuel a few times a year at nearly half price- Now that's what I call  real assistance-

In my personal opinion it's all this " Global warming" nonsesne  has has contributed dearly to the price hikes in Gasoline- We have been all hoodwinked- and its not going to stop there- Why?

i.e:.We have Venice recording only recently that water levels in its Canals have recorded the lowest levels ever, while at the same time we are told that the Polar ice caps are melting - Where has all this excess water gone..?

So many similar  events, does not equate that there is the claimed urgency to reform, but simply imply that we  may need to  reduce the use of fossil fuels and nothing more-

A planet capable of mending itself- So  sea levels have dropped , thus some ice is allowed to melt to fix the deficency -a natural event, and event of nature-

Thus by defualt connecting the above scenario to why the price of Gas is going to climb and climb to dizzy heights may seem far fetched- really?

Take a closer look - "Global Warming "= "Carbon Reduction": Carbon reduction = Alternative fuels-

Alternative fuels, means monthly, more and more vehicles  and industries  are slowly turning away from using  Gasoline- as this momentum builds, the Arab producing countries are panicking- The "Writing is on the wall"- the Arabs are grabbing hard currency as much as they can now, knowingly that in 7 years or so , their proifits from oil sales is literally going to halve- Dubia alone has gone into a construction frenzy using under paid cheap labour-  to ensure that by 2015, when the oil money starts to finally dry up- that their economy can survive via Tourism-

The Arabs are making a huge grab for cash is ostensibly being implied- Touching 200 dollars per barrel in less than 7 months is what  I  predict -  We'll get some encouring news in the next few months - and perhaps some releif- but when the next round of hikes occur , it's going to hit hard-

Forget about oil shortage-  it is arguable but possibly true that the Russian's  alone has enough reserves now and indeed yet to be exploited to last at least the next 150 years-

Get rid of "Stone age" OPEC- Let inept  Saudia Arabia stand on its own merits in selling its oil- while by stealth without being put under pressure - we all slowly convert to alternative fuels over the longer term any way-