Problem: Gas Price In the recent centuries, man has developed such needs that have conventionally required massive consumption of natural resources. Ever since the evolution of industrialization, there has occurred an abrupt downfall in natural resource reserves almost all over the world…
A vast majority of machines in different industries are powered by gas. Apart from the industrial utility of gas, it is an extremely important element of the modern age life style. In the contemporary age, there is massive consumption of gas even on the domestic level. We use gas heaters, gas ovens, gas stoves, and gas lamps. In addition to the in-house consumption of gas, a vast majority of vehicles on the roads use gas as a secondary fuelling source that works as efficiently as petrol does. The voluminous increase in the use of natural gas does not accord with its declining natural reserves. There is an inverse relationship between the two. Gas prices have risen almost all over the world in the past few years. Much of the rapid increase in the gas prices that has occurred in the recent years can be attributed to the inverse relationship between gas production and consumption rate. Current rate of gas consumption is alarming, and gas prices are likely to increase further if the current consumption rates sustain over next few years. Solution: Solution of this problem lies in wise utilization of the remaining gas. It is not advisable to completely stop the use of gas stoves or gas ovens because no alternative has yet been realized that would give better or even the same results as gas stoves or ovens do. ...
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(Gas Prices Essay Example | Topics and Well Written Essays - 500 Words)
“Gas Prices Essay Example | Topics and Well Written Essays - 500 Words”, n.d. https://studentshare.net/other/23447-gas-prices.
Why are Gas Prices Inflated? There are numerous theories doing the rounds every time there is an increase in the price of gas. Increase in prices of gas is inevitably followed by economic instability with direct impact on inflation. In the 90’s the West Texas Intermediate (WTI) crude oil was priced at 20 dollars a barrel.
Americans love purchasing large SUV and pickup trucks with low mpg rating in the area of 17 miles per gallon. In the summer of 2008 the price of petroleum reached $147 a barrel which is still an all time high. At that time the price of gasoline exceeded $4 a gallon.
A study suggests that every $0.25 increase in gas prices leads to a removal of $25 billion from the US economy.(Micheal Kopley, 2011). Higher gas price means that individuals have less money to spend on other goods. The decline in demand for goods translates into loss of jobs.
This fact is evident in Price hike which is observed between the years 2004-05. (How Gas Prices Work) It is to be stressed that the industrialized world survives basically on gasoline which is the blood line fluid in determining the economy of a country. The consumption of gasoline by the United States alone for a year is around 130 billion gallons which is almost 500 billion liters.
Factors affecting demand and supply of crude oil and natural gas have also been discussed.
According to economics theory, there is deemed to be a relationship between natural gas and crude oil prices. This is based on the fact that natural gas and crude oil are substitutes in consumption, as well as rivals, in production (Villar, Joutz).
In this regard, price of the gas has been one of the reasons that have affected its market, as well as, its supply in different parts of the world. This paper will try to discuss and analyze different causes that have resulted in the increase of gas prices in the world market, especially since last decade.
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.
Imagine that you are a manager at a delivery service and you are creating a report to project the effects on your company of rising gas prices in the next ten years. Using the preceding statistical analysis as your basis and outside scholarly resources to support your claims