Why is it that gas prices are rising so much, so fast? As a result, everything is costing us so much!!?

Question

Please give honest answers even if they sound ridiculous. Is it really because of the war in Iraq? Is it because people in the middle east or oil companies are charging high oil prices to the world? Is it because it's now very limited? What's going on? And is it possible to bring the cost back down to the way it was one or two years ago?

And thanks in advance for your help.

Answer 1

yes, all those reasons.

plus commodity speculators.

as for food prices, their rise is largely because of grain production diverted to make ethanol.

less grain means higher prices.

and that goes even more for the meat products that require that grain for food.

the oil price will never come back down.

it may vary some, but the trend will, probably, forever be up.

it's not reasonable to ask Saudi Arabia to sell their oil for less,

any more than it's reasonable to ask you to work for less,

and do more.

keep in mind, oil is pretty near the only resource that they have -- once it's gone, they have nothing.

any country that exports oil should look at it's exports, and decide what's best over the long term.

the US was the worst example of that.

until 1970, we exported oil.

now we're paying more every year than all the money that we got for all the oil we exported.

it's also true that it's becoming harder and harder to get oil.

100 years ago, the stuff was practically bubbling up out of the ground.

in that respect, the Beverly Hillbillies was not far off.

today, some of the wells are 5 miles deep.

however, oil company consolidation is not good.

fewer companies means less competition.

that's the same as in any industry -- air lines, newspaper, TV, telephone, etc.

so there's only bad news here.

if you have an SUV, you might consider getting something else.

you'll likely not like the money you're offered, but it'll be way less next year.

car dealers are already having trouble getting rid of their inventory.

Ford had a business plan to make a profit next year.

that's been delayed because it depended on SUV and truck sales being good.

they're not now, and they're expected to get much worse.

there is a reasonably good chance that right now, you're witnessing a major change in US culture.

in fact, world culture.

Answer 2

I have a more simple awnser, and yes, it prob sounds silly to those who have not looked the facts up.  Ok, in 1912 a bill was sighed by congress handing over all the finances and gold to a group of powerful and rich bankers. In turn this meant that the goverment had to take high interest loans for its goverment. Since that time we have be in war after war, and if you look at wars past, prices went up, there were times if you had certain types of metal you had to give it up for the "war cause" Now they just take them without your knowledge and charge the c**p out of you when you buy these products. You know it's funny with so many people opposed to the war and its reasoning, we still fund it? Any way, yes it's the war and I think if the money power was back in the hands of the goverment there might not be such a large deficit.

Answer 3

what a Q?

Answer 4

THE REASON Y GAS PRICES/ EVERYTHING IS GOING UP IS BECAUSE OF THE STINKY PRESIDENT WE HAVE ND THERES ANOTHER REASON IDK WHAT IT WAS...MY MOM TOLD ME!!!! ND DONT VOTE 4 OBAMA HE WAS THE ONE WHO WENT ALONG W/ THE GAS PRICES GOING UP!!!! VOTE 4 HILARY!!!!

Answer 5

Most of it is because of perceived shortage of supply.  The market is being driven by commodities brokers who think prices will be higher at some point in the future because of a number of factors (increased demand, natural disasters, political unrest, among others), some of which do affect supply.  But if there was a real supply problem, you'd start seeing real shortages and gas lines like in the 1970s.  There's plenty of oil right now.  It's fear that this won't always be the case that creates the speculative buying.  Other factors include the falling value of the dollar, the currency that oil is priced in.  Countries using the Euro and other currencies are seeing price increases but not at the same rate as the US.  Also, oil is a commodity, the same as gold or any other material item, and is seen as a hedge against inflation.

Contrary to what most people believe, we get the most of our imported oil from Canada, not the Middle East.  Asia gets most of its oil from the Middle East.  Regardless of where it comes from, it's sold at market prices.  

Any market is subject to peaks and valleys, and overheated markets are subject to rapid falls.  Oil is no different.  The perception of shortages can change very quickly and prices can plummet.  Look what's happened with real estate.  It happens with gold and other things.  It happened with oil in the 1980s.  When high prices made it economical to get oil out of the ground in more costly ways, like shale oil in Colorado, or worth investing in alternative forms of energy,  Saudi Arabia and other OPEC countries got nervous and pumped more - not that more was needed -and the market panicked and  the price of a barrel dropped to $10.  Remember how hard Denver and Oklahoma and Texas got hit when the oil business in those places collapsed?  The wind also went out of wind, solar and other alternative means.  I see this happening again, if our government will show some backbone and stand up to the enviro-terrorists that stand in the way of going after home-grown oil in Alaska and off-shore.  We have tons of oil.  If we could demonstrate some political will, that would instantly change the perception in the minds of the commodities speculators, and they will flee the oil market to put their cash somewhere else.  Another thing that can be done is to require speculators to come up with at least 50% of the proce of any futures contract they buy, instead of the heavy leveraging that they get away with now - 10% and less.  This will get a lot of the speculators out of the market and help restore the situation to reality. Right now, I see prices going still higher, but I do see the strong potential for a major oil market correction.  I do not see $2 gas ever again, but it could very well be below $3 in a year.

Answer 6

Supply and demand.  India and China are using more oil than ever before.  Nobody else is using less.  We haven't found any new places to drill for new oil.  Speculators and the fact that oil is sold on the world market in US dollars which continues to get weaker isn't helping.

Unless the world uses less or finds more oil the price wont drop.

Answer 7

Many people in my town belive gas prices are so high is  becouse of supply and demand and the war in Iraq.

The gas stations are turning into one big monopoly that if we don't do something then many people are not going to be able to drive cars or heat houses. I think if we all took one week and stop using gas and instead use our bikes or walk as much as possible then we would have stopped the gas station production for a week causing them to have to lower prices because of no buisness. We could also car pull alot more , cars that don't suck up as much gas and turn our heaters down in the summer and so it would make the need of gas and fuel to go down so the demand will go down hopefully. also use more reusables instead , and also not use plastic as much because we use oil to make the plastics wich means were taking out more of it and there is just so much of oil in the world and it will take millions of years to create more so if we slow down the production of oil, gas and fuel then we would not have to be in this predictament !

Answer 8

There are a number of reasons that gas prices have risen. Holds on drilling, tanks need oil, airplanes need oil, gas companies holding back and using supply and demand techniques. There isn't one reason as to why gas prices have risen. Take for example, diamonds. There are way way way more diamonds in the world than people think. If diamond jewelers hold back on how many they release, people think of them as precious, therefore they can hold on to there supply, raise the price, and the demand goes up. Gas on the other hand, might not produce the same effect because it is closer to being a necessity than a luxury, although that is changing. The higher the price of gas, the less people will buy. We will do all we can to preserve it in our own gas tanks and not use it so quickly.

2 ways to help out this problem:

1. Some say less dependence on foreign oil, I say more. If we are using our import/export trading abilities to its max, that is the best place to be in. It is too expensive to harvest, produce, and distribute it here in the states.

2. Finding cheaper alternatives to petroleum gasoline. Vegetable oil, E85, etc. They burn cleaner and are way less expensive. It is also a way to reuse cooking oils that are no longer suitable for food production.

Lastly, the price of groceries and other products are going up because they are dependant on gasoline. Ever think about how much gas it takes to fill an 18 wheeler? We are dependent on the trucking industry to bring groceries and other products to the giant supermarkets we all love to shop at. If the budget for shipping is raised, then the price of the product being shipped must follow suit to maintain a profit. I wish there were more local farmer's markets where I live because everything is fresher and sweeter. However they are being pushed out by super fresh food giants popping up left and right.

I hope that helps you out.