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Increase of Gas Prices - Essay Example
Pages 5 (1255 words)
One of the oldest and still-in-demand resources is the Natural Gas around the world, which is still being used in under-developed, as well we, developed parts of the world. However, demand and supply of this valuable mineral resource has been in variation due to a number of reasons…
Since last decade, gasoline prices have increased due to a number of factors that have contributed to its increment in the world market. In this regard, experts and economists have identified a number of factors that have contributed to the high prices of gasoline around the globe. Refining capacity has been identified as the biggest identified factor for the high prices of gas. Even if economical oil were available in the market, the prices of gas would still be high due to its process of conversion from the oil.
When scarcity is observed in the supply of gasoline, it has been noted that utilization of gas is done in a limited manner. Thus, supply and demand law of the economics plays a crucial role in the increase of gas prices. One of the examples for this law is that even if the supply of gas would be very high, the pumps would be found with out of fuels signs on the gas stations, as the utilization of gas would not be decreased, and rather increased due to its cheap cost. Thus, demand and supply would always be invertible, and thus, gas prices have been increased due to its scarcity, as well as, its demand around the globe. However, one of the advantages of high prices of gasoline is that consumption of fuel is discouraged by the high prices that cannot be afforded by everyone. (MacEachern, pp. 44-48, 2005)
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