High Gas Prices

Topics: Petroleum, Oil refinery, Natural gas Pages: 4 (1231 words) Published: September 10, 2006
Gas prices in the United States are breaking record highs. Millions of people need fuel drive to work, to school, and to the bank, to accomplish daily commitments. Some wonder how gas prices got so high. Many reasons like high taxes and demand, give strong evidence of the causes of high gas prices. The effects of elevated gas prices cause Americans financial woes and lifestyle inconveniences.

Many people assume the reasons for high gas prices, but are unaware of the significant explanations. Most people would speculate the culprits for raising the gas prices are the oil refinery companies because their profit equals billions, but in reality our elevated dependency on gasoline, higher taxes, and environmental regulations are the prominent causes.

Oil is an important element of American lives. Oil gives mobility, provides energy for homes and workplaces, and offers benefits from oil-based products, like plastic. "In 1993, our dependency for foreign oil was 46-percent. In 2000, it was 56-percent and projected to be 65-percent by 2020" which shows our enormous need for oil. (Hutchinson. 2000)

Many are unaware of the affects high taxes have on gasoline prices. "Federal taxes account for nearly 20 cents per gallon of gasoline sold. State and local taxes bring the total to 42 cents per gallon. Analysts estimate consumers would save a whopping $67 billion in one year if gas taxes were eliminated." (Paul. 2000) Not all States impose the same number of taxes, especially noticeable in the Midwest which has higher taxes than average.

In addition to these causes, the primary reason for price increases is environmental regulation. One example of regulation is the restriction of drilling for oil in Alaska which would considerably increase the gasoline supply up to 20 percent and reduce costs. (Simpson. 2005) Oil drilling in Alaska would increase domestic production and supplies, therefore, lowering gasoline costs. Another regulation is reformulated gas which is most...

References: Goolsbee. A. (September 27, 2005). The Grip of Gas-Why You 'll Pay Through
The Nose to Keep Driving
S5773. Retrieved on August 3, 2006 from www.senate.gov
Income 2004 (2004)
Talk. Retrieved on August 3, 2006 from www.house.gov
Poll: Higher Gas Prices Curbing Driving Among Poorer Americans
WCBC 880. Retrieved on August 3, 2006 from www.wcbs880.com
Rohrich, R
Prices? Capitalism Magazine. Retrieved on August 3, 2006 from
Why Do We Need Oil and Natural Gas? (2003-2006). Society of Petroleum
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