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)
It is not believed by everyone, but it is a fact that the total quantity of crude oil is not utilized for the production of gasoline. Gasoline is produced by converting only fifty-one percent of an oil barrel. Subsequently, heating oil, jet fuel, refinery gas, and a number of other oil products are produced by rest of the oil barrel. In the result, the role of a high demand commodity is played by the oil, and as oil is not produced by most of the countries, import of oil has been a regular and necessary practice in most parts of the world. (Jaffe, pp. 23-25, 2006) This also results in the increase in the high prices of the oil and gas around the globe.
Thus, fluctuation of prices can vary due to the demand and supply of different countries in a global oil and gasoline market. For instance, a flourishing economy has been represented by China, which has resulted in its high requirement of oil, as compared to its oil and gas requirement in the previous years. In the result, crude oil becomes shortage due to an increment in its global demand, and consequently, gasoline, jet fuel, lubricants, and prices of similar products become high. Therefore, increase in the demand of oil in a stabilized and economical country can affect the price of gasoline in other countries of the world. Thus, fluctuation of oil demand and supply is another potential factor that results in the higher prices of gasoline and other oil products in different regions of the planet.
Another major factor of the increase in oil prices is the distance of oil-producing country and the consumer country, as shipping costs vary from country to country. However, a number of complexities are included in this factor, as different countries have imposed different taxes on the import of oil or oil products in their region. In the past, the price of oil barrel was quite similar to the price of gasoline. If scarcity were observed in the supply of crude oil, the increase in o