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  • Why Are Gasoline Prices So High?

Economy

24 Apr 2007

Why Are Gasoline Prices So High?

  • By Bill Conerly
  • In Economy
  • 10 comments

James Hamilton has a good explanation.  If you live in a place with above average gas prices, his map may give you a clue.

Nutshell: overall gas prices are a product of normal seasonal fluctuation and the price of crude oil.  Combining the two effects produces an estimate of gas prices very close to actual.

As for state-to-state variations, look at taxes and other gasoline-related regulations.  (Hamilton doesn’t address this, but his map makes clear the significant role that states play.  Otherwise, why would adjacent counties in differing states have such widely different prices?

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Bill Conerly

    Comments

  1. Fuel Additive
    April 26, 2007

    This is a very interesting map to look at. Its amazing to me that with the effect that taxing gasoline is already having on prices that many politicians want to increase those taxes. I’m not seeing the logic here….

  2. mark
    December 31, 2007

    Gas is high because China is buying all the oil and there is little more oil to be discovered. I think we americans did it to ourselves by buying cheap chinese products. 20 years ago people in China worked for $1 a day or less. Almost all used bikes as transportation. Nobody had money. ………….. By today every Americans house is filled with chinese products. Today I hear there are over 300 million millionairs in china, as reported in my local newspaper,(more than the entire population of the United States). Thats 1 in 10 people in china ! Today there are over 50 major airports under construction in china and all at the same time (the usa has not built one in 20 years I think). Millions of Chinese are buying cars today. ………………….. Gas was $1 a gallon, give or take 40 cents for 10 years ending in 2004. Three years later its suddenly $3 a gallon. China is emerging and you havent seen anything yet. You will see $4 a gallon gas in 2008 and $5 in 2008-2009. Wild leaps to $10 and $15 a gallon and higher will follow within a few short years. Then Americans will be the ones on the bicycles because we wont be able to afford gas. We gave all our money to china in exchange for a few chinese made trinkets we filled our american houses up with. Now we are going to pay through the nose ! ………………………. We have to immediately stop buying chinese products cold. Do without. Use what you have longer before replacing it. Recycle. Conserve. Save the dollars and put the money in banks (USA Banks).

  3. joe zebra
    January 4, 2008

    i think gas prices are ridiculous man i have a ford super duty and i love that truck, but it cost me a fortune to fill it up. so change the gas prices. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  4. Chuck
    March 9, 2008

    Supply and Demand. That’s the reason for high “Gasoline” prices. Every is quick to point out demand but no one is willing to discuss supply. You won’t see accurate supply graphs that extend back any more than a year at any government or oil company web site. The oil companies are keeping a lower supply (as compared to demand) of “Gasoline” available now than they did prior to 2003. Everyone should know that if you can’t raise your price on customer demand alone, then manipulating the supply is the next best thing. Supply and Demand 101. If I were Ford, General Motors or Chrysler I would remove the the knife the Oil companies have put in my back and put my R&D to developing cars and trucks that didn’t need the gasoline that oil companies produce.

  5. Chuck
    March 9, 2008

    Supply and Demand. That’s the reason for high “Gasoline” prices. Every is quick to point out demand but no one is willing to discuss supply. You won’t see accurate supply graphs that extend back any more than a year at any government or oil company web site. The oil companies are keeping a lower supply (as compared to demand) of “Gasoline” available now than they did prior to 2003. Everyone should know that if you can’t raise your price on customer demand alone, then manipulating the supply is the next best thing. Supply and Demand 101. If I were Ford, General Motors or Chrysler I would remove the the knife the Oil companies have put in my back and put my R&D to developing cars and trucks that didn’t need the gasoline that oil companies produce.

  6. gerry
    May 13, 2008

    the cost of crude oil went up, the refinery is still the same, the employees did not get raises, the shipment of crude to refinery togas station (euipment and trucks) are still there, my question is if crude goes up 60% what percentage of this base product is in the total cost at the gas station. crude oil went up 60%….gas went up 100%

  7. Ray Pairan Jr
    May 22, 2008

    The ‘free market’ is an illusion a very effective propaganda spewed across the globe extolling the precepts from the gospel of the “The Free Market” preached by the Economic ministers of the faith.
    No more interpreting of illusion is necessary. It’s now time for action!
    Review my articles:
    A Green Future for Our Nation
    Benefits of Nationalized Oil Industry
    Nationalize the Oil Companies
    Economic Society
    At–> http://structuraleconissues.blogspot.com
    For a better understanding of what where facing.
    It is now time to make certain that everyone understands the truth, solutions, and what will happen if we fail to act now.

  8. Ray Pairan Jr
    May 22, 2008

    The ‘free market’ is an illusion a very effective propaganda spewed across the globe extolling the precepts from the gospel of the “The Free Market” preached by the Economic ministers of the faith.
    No more interpreting of illusion is necessary. It’s now time for action!
    Review my articles:
    A Green Future for Our Nation
    Benefits of Nationalized Oil Industry
    Nationalize the Oil Companies
    Economic Society
    At–> http://structuraleconissues.blogspot.com
    For a better understanding of what where facing.
    It is now time to make certain that everyone understands the truth, solutions, and what will happen if we fail to act now.

  9. Pankaj
    July 2, 2008

    Scooters and Mopeds is the answer to the oil companies. Send the oil companies and the speculators who have artificially increased the price of oil a painful message. HIT THEM WHERE IT HURTS — THE POCKETBOOK.
    Considering how congested the roads are with cars and how expensive gas is today (over $4/gallon as of today) and the trend towards even higher prices, it’s critical that Americans shift their thinking from SUVs and other gas guzzlers to alternative methods of transportation. Cheap mopeds, gas scooters and electric scooters must become a part of our lives considering you can get up to 90 mpg, they’re easy to park and navigate.

  10. oilfield equipment
    March 25, 2009

    its all about supply and demand. the gas prices are low now. I am not sure how long this will last.

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