Why does the price for gas keep going up and never seem to come down. This question had always stumped me, until I came accross this Swiss website. It gives us 20 reasons why the price does not come down.

  1. Opec increases its production
    – gas prices rise
    This is due to the economics of the market that we are all subjected to.  The increased demand for oil-tanker capacity raises the cost for shipping over proportion.
  2. Opec reduces its production
    – gas prices rise
    This is classic economics. The supply goes down, but the demand stays constant. The price for the product goes up.
  3. They signed a peace treaty in the Near-East.
    – gas prices rise
    The peace may be fragile. Everybody tries to bunker oil against the next breakout of hostilities. The increased demand raises the price.
  4. Fighting breaks out in the Near-East.
    – gas prices rise
    Hoarding raises the demand and the prices go up.
  5. Consumers reduce their consumption
    – gas prices rise
    This reduction in demand forces the refineries to produce under capacity. This raises the cost per unit of produced gasoline. These costs have to be carried by the end-consumer.
  6. Consumers raise their demand and use more gasoline
    – gas prices rise
    The oil companies fullfill a vital role in our market. By raising the price they counteract a higher dependency on raw oil.
  7. Consumers switch to alternate energy sources
    – gas prices rise
    Compound production for oil derivates becomes more difficult. This ultimately raises the price per unit and has to be carried by the end-consumer.
  8. Severe storms threaten the Gulf Coast
    – gas prices rise
    The supply is endangered. To ensure the supply meets the demand oil companies hoard refined gasoline, thus raising the demand and the price.
  9. Weather conditions are optimal world-wide
    – gas prices rise
    Due to the hoarding that took place when storms threatened demand has come down and refineries cannot produce at maximum capacity. Thus raising the price per produced unit.
  10. Stock piles for oil are full.
    – gas prices rise
    Large stock piles reduce the profit margin. The oil companies are fullfilling an invaluable function by contributing to ensuring the continued supply for the free world -it is only natural that the consumers should pay a part of the price.
  11. Stock piles are low
    – gas prices rise
    The high losses due to stock piling were carried by the oil companies up to now, reducing their profits. This is no longer feasable. The consumers have to foot the bill.
  12. The net-earnings of the oil companies have risen by 380 % compaired to the previous year
    – gas prices rise
    The numbers create an incomplete and distorted picture. The gasoline business itself does not look so good. Some parts of it even run at a loss that has to be covered by other business aspects of the companies.
  13. The net-earnings of the oil companies did not rise significantly compaired to the previous year
    – gas prices rise
    In a free market a product can only exist if it has a proper profit margin.
  14. A member of OPEC stopps production due to inner turmoil
    – gas prices rise
    The supply has diminished the price has been adjusted accordingly
  15. A member of OPEC resumes production of crude oil
    – gas prices rise
    The inflation costs since that time when production was halted was covered by the oil companies – contrary to the dictates of a free market. That cannot continue indefinitely.
  16. New substantial oil field were discovered
    – gas prices rise
    There is lots to do, lets get going. To ensure future supply we have to recover our investment costs. The cost for production keeps going up.
  17. The existing oil field are almost depleted
    – gas prices rise
    It is becoming more and more difficult and expensive to continue meeting the world’s undiminished demand.
  18. Two oil corporations merge
    – gas prices rise
    The merger is a sign of the times. Individual corporations can no longer survive in today’s increasingly competitive environment.
  19. The merger of two oil companies failed
    – gas prices rise
    Government anti-trust agencies prevented the merger and thus the possibility of considerable savings in the production process. The consumer will have to pay the price.
  20. A bag of rice fell over in China
    – gas prices rise
    The loss of the produce owned by the people of the Republic of China has to be replaced. This will use up energy that was not calculated into the original demand estimate. The price of the commodity energy – oil – has to go up.

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