Quick Cash Auto

Understanding Gas Prices

Posted by admin On March - 12 - 2012
Gas Prices

It seems that no matter what happens, gas prices rise. Many drivers are struggling as oil hits new highs, and there doesn’t seem to be any current end in sight at the pump. However, it’s important to understand how oil and gas prices work, and how each element affects drivers looking to fill up.

The fact is, while most drivers would love to blame the gas station, it’s not their fault. Gas stations have to purchase gasoline at a set price, and then they go on to pass that cost onto drivers. Actually, most gas stations only make pennies off of each gallon of gasoline; their real money comes from purchases of other items. In addition, a portion of each gallon of gasoline pumped at a filling station is actually made up of taxes. Different states tack on additional road taxes, maintenance taxes and others for gasoline, and some states have extra regulations which govern the exact chemistry of the gas citizens are pumping.

So who really determines the cost of a gallon of gas? Well, the issue is a bit complicated. First of all, it depends on where a gasoline provider purchases their oil. This oil is then refined into gasoline, but the original product is unrefined and out of the ground. While many people believe that America’s oil refineries purchase gasoline exclusively from the Middle East, the truth is, a lot of the country’s oil comes from Canada, Europe and America itself. While it’s true that a good portion of America’s oil does come from the Middle East, America would be able to survive without this supply.

Beyond that, it’s important to understand how OPEC shapes the price of gas. OPEC, which stands for Organization of the Petroleum Exporting Countries, is a group of countries which discuss how to best distribute oil and gas throughout the world. This group has a very large say in how oil is produced and by what means. Additionally, governments sometimes enact embargoes on other countries, meaning oil from major suppliers cannot reach certain shores.

Finally, environmental groups and political issues can stop oil drilling from taking place. Incidents such as the Deepwater Horizon in the Gulf of Mexico and the Exxon Valdez disaster of the ’80s often shutdown deep-water drilling and oil transfer, leading to higher prices. Drivers may also want to factor in the stock market, which involves traders and professionals who speculate about certain global events, which in turn, drive prices higher.

Gas Prices Prompt Anti-Obama Ads

Posted by admin On July - 25 - 2011
Oil Burning

With the rising cost of gasoline, consumers have been adamant that lawmakers do something to correct this crisis. Well, it appears that the government has decided to take action with the preponderance of radio spots that criticize the Obama administration and their plans for fuel economy.

These ads were controversial to begin with, but as negotiations have been ongoing, most of the major players worried that they would only hinder this process rather than get their point across. The automakers actually had voted to cancel them, but less than 24 hours later, the messages were running on the radio.

This happened Thursday after a midnight oil burning session on Wednesday that had planned to relegate these ads to the scrap heap in Michigan and other states that have direct ties to the auto industry. However, the Alliance of Automobile Manufacturers decided to reverse their decision and go ahead with the campaign after much deliberation.

Source on the inside have indicated that this was not a unanimous decision to get rid of this campaign as several representatives of the auto companies as well as the Alliance board itself were not all notified of this decision. This lead to some heated internal debates the following day with a new vote called for to continue going forward.

The ads were running on Thursday in a few of the target markets and will be maintained throughout the following week according to spokeswoman Gloria Bergquist who confirmed this decision, but would not provide any further details to reporters.

She indicated that the ads are up and running and will continue to do so in the foreseeable future according to a statement released late Thursday evening. Bergquist also further speculated that the group didn’t expect to receive this amount of coverage on this issue. The upshot is that the Obama administration is targeting a fuel economy figure of 56 miles per gallon for the entire car fleet. This figure is expected to be reached by the year 2025, which means that automakers can expect to achieve a 5% increase in their fuel economy each year from 2017 to 2025.

This figure has been vehemently opposed by the major car manufacturers who have created the radio campaign to try and curry consumer favor against the plan. They point out the still precarious recovery of the industry along with consumer confidence as major roadblocks to the proposed changes.

Gas Prices Expected to Crest $4.00 a Gallon This Summer

Posted by admin On April - 15 - 2011
Gas Prices

The recent turmoil in North Africa and the Middle East are continuing to push the price on a barrel of oil higher. The national average is approximately $3.76 a gallon with barrels running about $116 currently.

The increase in barrel prices reaches many places other than just a consumer’s gas tank. Many oil-based products are also seeing their prices rise along with businesses that are dependent on it. Fleets of trucks help deliver parts to factories and products to retailers. These entities are raising their prices as well to help offset the cost of fueling these vehicles. Those higher prices get passed directly to the consumer because of it.

The impact of rising gas prices on the American public generally equates to political consequences. It is one of the primary ways that Presidential approval can move in either direction fairly quickly. The average consumer views high gas prices as a sign of economic troubles or turmoil which reflects in their voting habits. Low gas prices reinforce the belief that economic stability is availability; whether true or not.

The current prices of gasoline have seen nearly 50% of Americans change vacationing plans in the summer to someplace closer to home. Nearly 62% of Americans have changed their driving habits to better accommodate the rising prices of gasoline that is expected to average $3.86 this summer. Approximately 68% cut back on other expenses to make further allowances for their gasoline budget.

Politicians seeking to use economic recovery as part of their platform could find their position harmed by high gas prices, regardless of the state of economy. The price of gasoline is a very tangible hit on the wallet of consumers while the overall state of the economy is much more difficult to weigh. Thus, it will be a tough sell for both President Obama and other politicians seeking to use it as part of their platform.

Further energy concerns have developed with the nuclear crisis in Japan. Near-term support for nuclear energy dropped almost 7 percent and will likely continue to fluctuate as the situation develops. Analysts are unclear what the long-term impact will be, but believe it to hinge entirely on how the situation resolves.

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