Why So High Mr. Gas Price?

Since when has going to the gas pump become as fearful as the dentist’s office after learning you need multiple root-canals? Gotta love going to the pump expecting to pay pretty much as much as you would for a nice dinner for two, desert and catching a flick at the theater… Or, if you’re like me, you’re just seeing these fun things you could have been doing with that money get scratched off the list as you bite your lip and stare, as if it was your worst enemy, at the gas meter never endlessly go up dollar by dollar. What’s left is an empty wallet, a filled-up car, and a strange feeling that you should be pushing your vehicle home as to not waste gas so you never have to go through this traumatizing experience again.

So what’s the deal, anyway? Why are we seeing these $3.50+ (and for you unfortunate premium fuel needing souls $3.75+) prices at the pump? A large part of the factor of gas-prices, accounting for about 55% of the price, is the cost of crude oil. Crude oil is practically the building block of gasoline, one barrel of Crude oil is 42 gallons which, when refined, produces roughly 19.5 gallons of gasoline.

Lets take a look at the following prices/ barrel covering the last 5 year statistics:

March 17th, 2006: $62.80
March 16th, 2007: $57.11
March 14th, 2008: $110.21
March 13th, 2009: $46.25
March 12th, 2010: $81.24
March 15th, 2011: $97.80

Seems pretty up and down, no? So why is it that the prices of crude oil stay the same, or follow a steady trend up or downward? The price of crude oil varies for several reasons; supply and demand, stock market, government regulations, natural disasters… the price reflects all of these things and the result is sometimes not to our liking as a consumer.

Sometimes the high prices are due to local inflation. For example on Mar 15th, 2011 the buying rate of one barrel of crude oil is $97.80, which is actually less than it was just a week ago when prices were hovering around $104/barrel. Although there is a drop in the price of crude oil we are still paying just as much as we did for gasoline. This is because local gas stations will adjust the price, usually slightly, to make a profit while they still can before their competitors lower their prices to reflect closer to the price of the lowering crude oil prices.

Sorry to say, but it seems like prices are going to stay up… for a while. The projected cost/barrel of crude oil in one year from today is $112/barrel. Put down your protest signs and start looking at the vehicle you drive, what kinda MPG’s that baby got? 20 you say? Now might be the perfect time to get into something that won’t have you visiting that necessary evil that is the gas pump. May I make a few suggestions?

Get a Chevy Volt and you’ll see the station as much as the “only seen at family get-togethers” side of your family.

The Chevrolet Cruze Eco has the best highway mileage of any gas engine in America at an EPA estimated 42 MPG.

Maybe it’s time to ask yourself…

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