Fuel Crisis

Topics: Petroleum, Oil refinery, United States Pages: 2 (659 words) Published: July 20, 2010
Cause and Effect Essay
What is the biggest complaint from consumers about driving your car these days? Many people think this cost is form gasoline only, but many other factors determine what you pay at the pumps. Results of primary use for gasoline, gasoline prices rising to all-time highs and environmental programs are the reason why consumers are complaining about driving their automobiles today. The primary use for gasoline is in automobiles and light trucks. Fuel produced all year round, and is delivered from oil refineries through pipelines to a massive distribution chain serving 167,000 retail stations throughout the United States ("EIA Brochures", 2004). Refineries produce millions of barrels of gas a day; but not all barrels of gas are delivered to retail stations. Cost of crude oil to refiners, refinery- processing costs, marketing and distribution costs, and finally the retail station costs and taxes. The marketplace forces of supply and demand determine the price of fuel. If demand grows or if a disruption in supply occurs, there will be upward pressure on prices (The Price of Fuel). In return what the consumer pays at the pump reflects the cost to produce and deliver gasoline to consumers. In the United States, gasoline prices rose to all-time highs between mid-December 2004 and mid-March 2005. Underlying cost of crude oil was the biggest reason for the increase in prices. Crude oil is produced by many different countries and which is overseen by OPEC. Crude oil costs increased are related to the falling value of the U.S. dollar, which is used by OPEC to price crude oil worldwide. The broad inability of the U.S. refining system to satisfy steadily rising gasoline demand, has also contributed to higher prices at the pump for consumers. ("EIA Statistics, 2004"). Consumers will spend billions of dollars a day to fill their automobiles; but when the price of a barrel of gas increases; a consumers may only spend millions of dollars. Supply...

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"EIA Renewable Energy- Renewable Energy Consumption and Electricity Preliminary Statistics." U.S. Energy Information Administration - EIA - Independent Statistics and Analysis. Web. 14 July 2010. .
"A Primer on Gasoline Prices." Mississippi Petroleum Marketers and Convenience Stores Association. Web. 14 July 2010. .
Token, The Same. "The Price of Fuel | What Affects Fuel Pricing." The Price of Fuel. Web. 14 July 2010. .
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