Everyone’s Gasoline Problem Essay

684 WordsFeb 9, 20123 Pages
Everyone’s Gasoline Problem Gasoline is one of several petroleum products made by refining crude oil. On average, gasoline constitutes almost half of the total petroleum products derived from a barrel of crude oil, although the amount of gasoline that can be produced from a barrel of crude oil varies among gasoline reaches the consumer through a complex system that begins with extracting crude oil and transporting it to refineries, mostly via pipelines, marine tankers, and barges. At the refineries, crude oil is processed into gasoline and other petroleum products. The gasoline is then transported again, usually via pipelines, marine tankers, and barges to storage terminals for wholesale distribution. From there, it is shipped by truck to retail stations, where consumers pull up to fill their tanks. The EIA (Energy Information Administration), according to them, there are four element which define the price consumers pay for the a gallon of gasoline at given time: A: The price of crude oil B: Taxes C: Refinery costs and profits D: The distribution and marketing costs and profits. There are number of key factors cause the retail price of gasoline to vary over time. Let’s see what are these key factors, which change gasoline price with over time: 1: This is very important; gasoline price changes are caused by changes in the price of crude oil. Normally the trend in gasoline prices has generally tracked the trend in crude oil prices, although the two do not necessarily rise and fall in lockstep. 2: Gasoline prices vary because of changes in how much gasoline we demand relative to the supply. 3: The federal and state requirements calling for special gasoline blends to improve air quality can make it more costly to produce gasoline, thus increasing its price. 4: There is another factor and that is a seasonal factors affect demand and supply, and that's why,

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