Based on the article, “How Gas Prices Work”, various factors where listed that caused the excessive profits for rising gasoline prices. The first reason mentioned in the article was the world crude-oil market tightens and low its inventory. If the demand for gasoline is high, the refinery may not work effectively and yield the supply. According to the U.
S. Department of Energy, they outline the following items for the cause of rising gasoline. Those items include taxes, distribution and marketing, refinery and station markup and crude oil. Another reason that was pointed out was the growing demand can sometimes outgrow refinery capacity. The article stated that refineries perform maintenance during the spring season which impacts the gasoline market. Reports show by the end of May, the refineries are set to be working a full capacity. According to the textbook, the gas prices spike due to natural disasters. When Hurricane Katrina hit, Americans saw gas prices rise as well as the supply and demand due to damaged equipment and refineries.
Some examples of equipment and refineries are offshore drilling platforms and shipping ports that receive oil tankers.We the people control the market prices by how much we drive our vehicles, how often we drive them and even where we drive. The statics show in the article, “How Gas Prices Work”, that Americans consume 178 million gallons of gasoline daylily. Like many other Americans, my family and friends take vacations primarily during spring break and the summer season. The market factors in the people will most likely consume the most gas during the summer month than any other time of the year.
The market can project and has statics showing when people travel the most and the amount during the year. Due to this gas stations can raise prices from one cent to almost ten cent.I think that looking at all articles and the chapter readings, is that changes are occurring every day. Everyone contributed to the role of supply and demand for the marked. I think that government plays a key role in the regulation of supply and demand which ultimate effects Americans and their livelihood.
ReferencesKevin Bonsor & Ed Grabianowski “How Gas Prices Work”.HowStuffWorks.com.
and Karen Gebhardt. Essentials of Economics. New York: McGraw-Hill/Irwin, 2017. Print.