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Why Are Gas Prices So High ?
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Gas prices are mainly high because the price of oil is high. There's a lot of talk about price gouging, and prices go up fast and come down slowly. There's a little truth to that, but it's not the main event.
Oil prices are high because World demand is up and World supply is not. OPEC is almost topped out, and holding back a bit. China and India are growing fast. Iraq oil is still down a bit, and should have gone up. The main drivers here are
(1) OPEC has not expanded capacity much since 1979.
(2) Non-OPEC is nearing it's long-term production peak (we're running out).
(2) China is booming.
There is one other unseen factor that's the biggest of them all. When OPEC cracked in early 1986, conservative and liberal both argued to put a tariff on foreign oil to keep the price up and keep conservation going. Reagan and Bush senior blocked this. Bush senior because of oil ties, and Reagan because he didn't get it. The Republican Congress proposed it in 1986, and he slapped it down.
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 Price Gouging?
According to the papers, the current energy bill may have as much as $8 billion/year of subsidies built into it. But even if we get it back, it won't put a big dent in the $1.25 billion per day we spend on gas, not to mention heating oil, jet fuel and what not.
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http://zfacts.com/p/595.html | 01/18/12 07:17 GMT
Modified: Mon, 03 Dec 2007 07:37:34 GMT
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