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Effects of rising gas prices
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Not only have gas and oil prices changed but they have made everything else go up in price. The cost of living and the way that people are living is effected by these rising costs. In this paper I will discuss the different ways that these prices are affecting everyday life. The way that everyone has changed things in there life would be transportation and business costs.
Gas Prices have changed a lot over the years and it seems to be increasing in cost and that it is not going to change. According to Foreman (2008), in 1981 the cost per gallon was $1.35 and now the cost is between $2.84 to $3.23 . Some of the reasons that the cost of gas is going up is because of the rising cost of oil. Gas prices are affecting people in there everyday lives with driving, living expenses, and with the cost of their living. Families are having to set a budget for there fuel and are having to not drive as much.
Oil Prices are at there highest points and the repercussion of this is the cost of gas and the cost of living. The cost per barrel is going up, at that point the cost of fuel goes up as well as everyday costs. The cost per barrel is “$91.77 to $ 100.09 ( Oil prices rise back above $91 a barrel, 2008)” , this year alone and only seems to be getting worse. The war has helped to make the cost of oil go up, because we are at war with Iraq and that is where we get our oil. There is a shortness of oil and with this the cost of oil will go up, so will the cost of living, and the cost of fuel.
Across the United States individuals are feeling the high prices of gas and oil prices. These prices are starting to hurt our economy because people are not being able to travel as much as they used to be able to. Families are feeling the hurt when they do travel because when people go to go camping with there children it costs more in food then they had in there budget and same with fuel.
Since fuel is regarded as a necessity, the increase of fuel prices would have a certain impact on the Australian economy. This will have an effect on a variety of economic aspects which include; demand and supply, elasticity, market equilibrium and disposable income. The goal of this analysis is to discuss the effect that the rise in petrol, holding all things constant (Ceteris Paribus), will have on the Australian economy.
Brent crude, the main international benchmark, was trading around $48 a barrel. The American benchmark was at around $45 a barrel (Clifford Krauss). Regular gas nationally now averages around $2.65 a gallon, compared to $3.45 a year ago. Now the law of demand states consumers will buy more of the product if the price falls; of course when gas was at it's lowest peak everyone was driving around with there a/c on. They would use gasoline more often since it was not hurting their pockets as much. Now there is some instances where other goods and services can drop from gasoline prices. This can include a lawn mowing services and automotive business.
People need oil for daily life and work. Since World War II, oil had caused many serious problems in United States and throughout the world. Remarkably, economic and social problems were heightened by the emerging energy crisis. By 1974, the United States gained a third of its oil by importing from the Middle East.[ James Oakes, et al. Of The People: A History Of The United States (Oxford University Press, 2011), 881.] When the heavy war between Israel and Arabia erupted, the United States was not able to gain enough petroleum because it supported Israel. To show the dissatisfaction with the United States’ support to Israel, Arab members of the Organization of Petroleum Exporting Countries even raised oil prices. “Overnight, OPEC raised the price of its oil from $3 to $5.11/By ”[ Merrill, Karen R.. The oil crisis of 1973-1974: a brief history with documents. Boston: Bedford/St. Martin's, 2007, 22.] Not surprisingly, the United States was strongly affected by the oil shortage and the the high price of oil. Homes and businesses could not easily solve the serious problem. Drastic protests occurred in many states such as Arkansas, New York, and Florida because a huge number of drivers could not accept the high price of gasoline.[ Merrill, Karen R.. The oil crisis of 1973-1974: a brief history with documents, 1.] Transportation was decreased in order to use less oil. Faced to the great challenge, several presidents analyzed the seriousness about the oil crisis and provided effective ways of reducing the use of oil.
The automotive industry is considered elastic. The prices fluctuate depending on supply and demand. For example, when the economy takes a downturn and car sales are down the automakers attach incentives to the purchase of new vehicles to stimulate sales such as interest-free loans, rebates and lowered prices to encourage Americans to purchase their goods. Substitutes are available in the foreign car market. Lower cost, more fuel efficient models are available from many foreign car makers. Policy makers have placed limits on the amount of foreign cars that can be sold in the United States but in recent years the demand is higher so policy makers must respond to that demand. Past statistics tell the story of when fuel prices surge, smaller fuel efficient cars are more in demand. Higher fuel prices cause households to reallocate money from other areas to purchase fuels at higher prices because fuel is needed for transportation to and from work. When fuel p...
There is a great effect on the economy due to the sale of gas. The major effect of
The Bakken formation ranks as one of the largest oil developments in the U.S. in the past 40 years. There has been many changs in and around my small hometown of Mohall, North Dakota since the recognition of how large the Bakken formation is and what opportunities it brings to everyone. Many of the articles that you have read about the Bakken formation has been about Williston and other areas closer to the western part of the state, but the effect of the boom is being felt farther out than that. I will discuss the changes that have been both helpful and hurtful in my hometown of Mohall.
Gasoline and the economy, the impact it has on the society. The current gas prices have a larger impact on consumer spending, however not so much on the percent of gasoline purchased, after all people still have to drive themselves places. (consumer psychologist.com) A major increase in cost will be necessary to lessen the quantity demanded. Gasoline is too costly and harmful to the economy and the environment thereby society needs to find alternative fuels, which best serve, the society.
Since the 19th century, gas has gradually become a necessity to mankind. It has been used for lighting our houses, to produce heat, to cook our food and to run our vehicles. As time passed, the price of gas has known many changes in Montreal. By the year of 2008 the price was relatively low, but suddenly became very high in 2014. This year in Montreal, the prices are as low as 3.4 US $/G. When considering the previously mentioned facts, we ask ourselves why the price of gas is low and what are the factors fluctuating its price. The main factor responsible of gas price changes is the cost of oil.
The economy is a very fragile thing; however, it can have an enormous impact on people. Americans are especially affected because they are so greedy, they always want more. Because Americans are very materialistic, they can become overly arrogant and possessive since they are used to getting their way, on account of having money. Some people are never satisfied with what they have; they are always on the lookout for more money and more possessions. Man requires food, shelter, clothing and fuel; everything else is superfluous.
The modern world of today runs on fossil fuels with crude oil being the live blood of industrialized countries. Though much of the twentieth century old was plentiful easily acquired and low in cost it has only been in the past thirty years that we have seen oil prices rise substantially. This can be attributed to many different reason. These price changes have challenged the industrialized world to become more creative with their techniques of both acquiring oil and using it.
We the American people have seen rising oil and gasoline prices continuously over the last few decades. Each year is slightly higher than the last. However, we have seen a few instances where oil and gasoline prices have spiked rapidly enough to invoke the American public to stop spending or cut back. The first time in recent history was after the hurricanes Katrina and Rita in 2005. Then, in July 2008 we saw a massive jump to the current record high national average of $4.50 per gallon of gasoline. Oil at this time was over $115 per barrel of light sweet crude which is the oil that American’s use in their gasoline. Currently the US oil and gasoline prices continue to increase. In the last month gasoline alone has risen almost 17 cents a gallon that’s slightly over a 5% increase (source). Compare the increase in the last month to the average yearly increase of %14 or roughly 39 cents per gallon (source). This leads to a particular, why is the price of oil and gasoline increasing at such a rapid rate? Three possible reasons for this could be: the unrest in the Middle East, speculation and risky trading on futures, or a simple difference in supply and demand.
The U.S dependency on foreign oil presents many negative impacts on the nation’s economy. The cost for crude oil represents about 36% of the U.S balance of payment deficit. (Wright, R. T., & Boorse, D. F. 2011). This does not affect directly the price of gas being paid by consumers, but the money paid circulates in the country’s economy and affects areas such as; the job market and production facilities. (Wright, R. T., & Boorse, D. F. 2011). In addition to the rise in prices, another negative aspect of the U.S dependency on foreign crude oil is the risk of supply disruptions caused by political instability of the Middle East. According to Rebecca Lefton and Daniel J. Weiss in the Article “Oil Dependence Is a Dangerous Habit” in 2010, the U.S imported 4 million barrels of oil a day or 1.5 billion barrels per year from “dangerous or unstable” countries. The prices in which these barrels are being purchased at are still very high, and often lead to conflict between the U.S and Middle Eastern countries. Lefton and Weiss also add that the U.S reliance on oil from countries ...
In the year 1990, the average cost of gas in the United States was one dollar and fifteen cents. Now in Michigan, the average cost of gas is three dollars and fifty-four cents. Important Quotes Some important quotes from the 1990s are from Nelson Mandela. “Do not judge me by my successes, judge me by how many times I fell down and got back up again.”
The article by Mike Moffatt shows the price elasticity of demand for gasoline. According to Molly Espey the average price elasticity of demand for gasoline in the short- run is-0.26 and -0.58 In the long-run, which is a 10% raise in the price of gasoline lowers quantity demanded by 2.6% in the short- run and 5.8% in the long- run.Also, there are a studies were conducted by Phil Goodwin, Joyce Dargay and Mark Hanly at review of income and price elastics in the demand for road traffic and each of them has different study. Furthermore, the realized elasticities depend on factors such as the timeframe and locations that the study covers. If the gas taxes will rise, will cause consumption to decrease.
In an oil import economy, impact of rise in oil prices is eventually borne by households as explained below through the Table.