Everyone's Gasoline Problem

Submitted By zkeatley71
Words: 929
Pages: 4
Open Document
Business Economics GM545
Winter 2012 - Session A

Everyone’s Gasoline Problem
Americans drive three trillion miles a year, equal to 820 trips between Pluto and the sun. The United States uses 178 million gallons of gasoline a day (How does OPEC influence gas prices?, 2012). For most of us, this has an enormous impact on our family’s weekly budget. So why does this happen and who’s to blame? This topic has several factors that can greatly affect the supply and demand of gasoline at your local gas station.
For starters, gasoline is a byproduct of crude oil and the majority of crude oil is produced and sold by Organization of the Petroleum Exporting Countries or OPEC. OPEC consists of twelve countries that include Africa, the Middle East and South America. OPEC states on their website that their mission is to coordinate and unify the petroleum policies of its Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry (www.OPEC.org, 2012) It can be argued as a good or bad thing that they control the flow of crude in order to maintain a price point for all of their producers. This is source number one that will impact the cost of gasoline.
From that point the crude oil is moved to a refinery where it undergoes the process of transforming it into other usable products such as gasoline. However, not all crude oil is created equal and some are going to be more cost effective to produce a higher quality product. There are 144 refineries operating in the United States today however, the last new refinery built in the U.S. was back in 1976. While most of these refineries have undergone improvements to increase output over the years, the U.S. still finds itself coming up short especially during times of high demand. This is source number two that will impact the cost of gasoline.
Combine these two on any given day with any one of the other factors that impact our price such as worldwide demand from other developing countries, a natural disaster, a war, or the falling U.S. dollar and the result will push up the price of a gallon of gas. Just the idea that OPEC will reduce the number of barrels of crude to the U.S. will give justification of the refineries to jack up prices in order to protect themselves but it typically takes a little longer for prices to fall back.

Chapter 8, Question 11
A purely competitive market exists when the following conditions occur:
Low entry and exit barriers - there are no restraints on firms entering or exiting the market
Homogeneity of products - buyers can purchase the good from any seller and receive the same good
Perfect knowledge about product quality, price, and cost
No single buyer or seller is large enough to influence the market price (Microeconomics - Perfectly Competitive Markets , 2012)
I absolutely believe that the internet has shaped our markets and given consumers the ability to seek out information on products, companies, and pricing however, I don’t believe that it has impacted all markets in this way and consumers cannot control the demand and availability of products
I mention this because my experiences and time spent finding the best price for a given product have often led me to find that the product with the best price was either unavailable or the company offering the product charged ridiculous fees for shipping and handling in order to make up the difference in their low price.
Personal computers are a good
Show More

Related Documents: Everyone's Gasoline Problem

Paper #1

September 08, 2013 Paper #1 In my ninth grade year I thought that everything would be a breeze. I was completely lost the first three weeks of school. When I saw how much freedom I had being in high school, I was too excited. It was so much to be in and be a part of. I immediately wanted to join things, but I knew that I had to stay focus. High school is so easy to get off track, that if you don’t pay attention to what you are doing, and stays organize, you will fall in a whole. My…

Words 1460 - Pages 6

PAPER 1

History 2 5/1/2012 History Paper 1 Historical Figure: “Nikola Tesla” Throughout history, there have been many great scientists and inventors that have had a big influence in the United States, as well as the entire world. One of these scientists was Nikola Tesla. Many times he is referred to as the genius who changed the way in which we use energy. Nikola Tesla was born to Serbian parents on 28 June of 1856 in the village of Smiljan, in the Austrian Empire. His father was Milutin Tesla, who was…

Words 2676 - Pages 11

Paper 1

Nat Bedford CAS WR 100 K6 Paper 1 9/28/12 Women in Leach’s New Capitalist Culture: Equality in the Department Stores Historian William Leach, in The Land of Desire, argues that a new culture developed in the United States after the Civil War into the early twentieth century, shaped by capitalism. A part of this new culture, Leach claims, is the “democratization of desire” (Leach, 3). An idea that now everybody could desire whatever they wanted, there was no social class limit on what you…

Words 1357 - Pages 6

paper 1

Ana Gonzalez September 29, 2014 Diversity in Society Paper #1 In “The Pedagogy of the Oppressed” by Paulo Freire, Freire focuses on the causes of oppression, why it is difficult to stop it, and what one can do to help prevent it. Oppression takes away the humanity from those being oppressed and also those who oppress –it is the biggest problem of humanity. It is humanity’s biggest problem because many do not treat others as their own kind – instead they treat them like objects that do not have feelings…

Words 1448 - Pages 6

Paper 1

The two defining wars of the decade have been the ‘War on Terror’ in Afghanistan and ‘Operation Iraqi Freedom.’ The main beginning of both of these wars would be 9/11. The attack on America including the both World Trade Centers in New York, as well as the Pentagon in Washington, and the lost plane over Pennsylvania, was the worst American disaster in history. The attacks killed over 3,000 innocent Americans. On September 18, 2001 President George W. Bush asked congress to declare war on those who…

Words 470 - Pages 2

Paper 1

Sehar Resad Professor Lisa Ruddick (CA: Eric Powell) Introduction to Poetry 3 November 2014 Design Tactics in Robert Frost’s Design Robert Frost’s Design, is an intricate poem taking the reader on a journey of questioning whether the random occurrences in the world are mere coincidences, or alternatively, occurrences that are designed to happen or controlled with a purpose. This question is further complicated by the ideas of lightness versus darkness and good versus evil, and how something such…

Words 1751 - Pages 8

Paper 1

Health Care reform in the United States is part of an ongoing debate for years and of most recent substantial legislation. Even the Presidential Elections between Obama and Romney was a big issue on the debate platforms. I will discuss some of the key issues at hand are: In what ways have recent health care reform measures expanded or inhibited access to care? How might the changes to access influence utilization? Understanding the concept of what universal health care is and how the current care…

Words 606 - Pages 3

Paper 1

Up until recently, interracial marriage was not a widely discussed or contested subject because of its link to the history of racism and sexism. Even today, for example, many families who follow their ancestor’s footsteps on the topic of tradition forbid their children to be married off into a random family. Similarly, in the seventeenth century colonial America, there were many strict laws that were enforced to punish blacks, women, slaves, servants, and other classes of people who engaged in…

Words 1126 - Pages 5

Paper 1

Unit 8 Project Courtney Cook June 12, 2010 Employment and Staffing Dr. Sherri Beasley Background checks are a useful tool for employers to determine the fit of a candidate to the organization. They pull up any issues or discrepancies that may not have been provided by the candidate during the interview. It is very important that during the interview, the candidate is advised that there will be a background and reference check conducted so that they cannot say they did not know. After…

Words 937 - Pages 4

Paper 1

Hoang Le HIST 1302 – 502 Paper 2 11/19/2014 The Black Power movement was a collective social and political expression of pride, strength, and self-determination during the late 1960s and 1970s in the United States. It was a logical progress of the African Americans civil rights movement. However, the era of Black Power movement overlapped with an expansion of African Americans’ political power development and therefore, it was interpreted differently within and outside the black communities. The…

Words 458 - Pages 2