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Tuesday, May 24, 2011

Gas prices affected by wide range of factors

Gas prices affected by wide range of factors, factors that affect gasoline prices :Summer driving season is upon us and so is our continuing concern about gasoline prices. Gasoline prices are affected by a wide range of factors. The dominant factor is the price of crude oil. Many additional factors weigh in on crude prices and, ultimately, the price we pay at the pump. Geo-political conflicts, weather, OPEC decisions, speculators, exploration restrictions, inflation and local marketing efforts all factor into supply and price.


There are certain misconceptions about petroleum and major American oil companies. First, the largest major oil company does not even rank in the top ten largest producers of petroleum when nationalized oil companies like the National Oil Company of Libya are considered. Second, local gasoline marketers determine the final retail price. Major oil companies like ExxonMobil do not own and operate stations in Wisconsin, but sell to local retailers at a wholesale or “rack” price. Third, the United States imports nine million barrels of crude oil per day and Canada, not Saudi Arabia, is our largest supplier.

Fourth, demand for petroleum is increasing in the United States and will continue to do so through 2035 and beyond. Fifth, almost one-third of a barrel of crude oil is used for products other than motor fuel. These products numbering in the hundreds, include paint, fertilizer, plastics, medicine, carpeting and asphalt. Finally, according to the Energy Information Administration, out of every dollar spent on gasoline, roughly 68 cents is the cost of crude oil and about 12 cents goes to state and federal taxes for maintaining our transportation system. Refining, distribution and marketing, including profits, add another 20 cents.

So, with all of these variables, how can motorists directly affect motor fuel costs? Increase your fuel mileage by altering driving habits. Aggressive driving such as speeding, heavy braking and rapid acceleration can reduce mileage by up to 30 percent. Observe the speed limit. Use cruise control on highways. Remove excess weight. An extra 100 pounds can reduce mileage by up to two percent. Avoid excessive idling.

These direct methods can show immediate results, but less direct, long term actions can stabilize our nation’s energy security and, if past history is a guide, stabilize prices. As I mentioned earlier, Canada is our largest supplier of crude oil with over 20 percent of imports; and we are only beginning to realize the vast reserves that are available in Alberta’s oil sands. These reserves are second only to Saudi Arabia and can eventually supply over 30 percent of American demand. In addition, these oil sands will displace imports from less friendly, less stabile and undemocratic nations. Tell your elected officials to publicly support increasing oil sands crude imports in the interest of energy security.

President Barack Obama recently called for increased domestic exploration for crude oil. This is a positive first step, but we can and should go further. The U.S. has vast untapped crude oil reserves of its own in places like the Arctic National Wildlife Refuge that will not be explored under current law. And, the industry is just beginning to comprehend the huge scale of our oil shale resources in states like Utah and Colorado.

Going forward, you will also see petroleum companies investing even more in alternative energies. In fact, major oil companies are among the largest investors in alternative energy development in the world.

No one likes paying more at the pump, including me, so it makes sense to use common sense driving habits to increase mileage; and, support North American solutions for long term energy security. For the latest updates PRESS CTR + D or visit Stock Market news Today

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