. 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. efining 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 disruptions, such as scheduled or unscheduled refinery maintenance, can slow or stops production of gasoline for a short time, which can prompt bidding war for available supplies. BP oil spill that is losing millions of gallons oil a day could increase gas prices.
Consumers who live in remote areas have to decide to travel to get lower-priced gas or pay for the convenience of higher local prices. United States is aimed at environmental programs to reduce air toxins, smog, and carbon monoxide. Environmental Protection Agency estimates are that Federal Reformulated Gasoline costs about 4 to 8 cents per gallon more than conventional gas; this differential, and often even less, is generally reflected in retail prices (“EPA”, 2007). Shipping costs from the refinery to market, as well proximity of refineries to crude oil supplies can be a factor.
Areas farthest from the Gulf Coast are the source of nearly half of the gasoline produced in the United States, and thus, a major supplier to the rest of the country. Transportation from areas of the Gulf Coast can tend to increase gas prices. Since gas can rise overnight with no rhyme, or reason, it is easier to understand when the consumer understands the factors that go into that price. Whether it from how much we drive on a daily bases, to taxes charged by federal state, and/or local governments. There are many variables that go into calculating gas that the consumer uses today. Works Cited EIA – Renewable & Alternative Fuel Data, Reports, Analysis, Surveys. ” U. S. Energy Information Administration – EIA – Independent Statistics and Analysis. Web. 14 July 2010. . “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. .