Wednesday, May 10, 2006

Explanation of High Gas Prices

Betsy's Page finds one of the best explanations of high gas prices. Surprisingly, the explanation is in an NPR article, not exactly a conservative outlet.

The writer breaks down the price of gasoline. Out of the average $2.90 per gallon, $1.60 is for crude oil, 64 cents is for refining, 55 cents is for taxes, and 11 cents is for distribution and marketing.

Though the public seems to blame oil companies for high prices, the NPR article explains that prices of crude oil are set by the global market rather than by oil companies. According to the article:

So you have a situation where demand has been growing steadily and inexorably, and the system of supply is quite vulnerable. That's the basic recipe for high prices.

Despite high gas prices, use of gasoline in the U.S. has increased from a year ago, as the article points. How do we reduce the price of gasoline? The answer, according to the author of the article, is to increase supply and to decrease demand.

Even NPR understands what causes high gas prices and what can fix the problem. When will the mainstream news media inform the public? Until the public realizes the truth about gas prices, politicians will pander to the public and not address the real underlying causes.

1 Comments:

Blogger Freaki said...

Something’s wrong here! $1.60 a gallon for crude? In a 55 gallon barrel that’s $88 a barrel!! I know the price of crude is high but come on! Do they think we are that gullible. Gas prices are stupidly high. There is no excuse for it except for corporate and govermental greed. However I have found a way to save money on my personal gas bill and even make money with the high gas prices. Give it a look see it really works. http://www.4ecorp.ws/kmac1234/

5/18/2006 01:28:00 PM  

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