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gasoline prices
price of crude oil
price of gasoline
oil refineries
many different things
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Gasoline Prices Are On The Rise - How To Lower Your Gasoline Bill
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Gasoline Prices Are on the Rise  -  How to Lower Your Gasoline Bill

US gasoline prices have risen 14 cents per gallon in the last 4 days. That's a 4% increase in the price of gasoline in 4 days, or an average of 1% per day. Should this trend continue, we will see the price of gasoline hit $5 per gallon in a little over a month. How will we afford it if this trend continues?

This dramatic spike is gasoline prices has been a steady increase the entire month of February. In researching this article, I learned that everyone has their own angle on why this is occurring. The one thing that is certain is that it isn't only a US problem. The price of heating oil and gasoline has risen sharply in Canada and Europe in February too.

Why is the price of gasoline so high?

Just as the crisis in Greece was not caused by one problem, the rise in gasoline prices is caused by many different things. Here are my opinions on what has caused this recent trend.

*Europe has been experiencing one of it's coldest winters on record. Additionally, some areas have seen record amounts of snow. This has lead to a much higher demand for crude oil in Europe. Higher demand leads to higher prices.

*Last year, 2 oil refineries in Philadelphia closed and Sunoco is discussing closing a third in the summer of 2012. Additionally, a large refinery closed in the US Virgin Islands in February 2012. This means the supply of refined oil in the northeastern part of the United States has decreased which is causing a spike in heating oil and gasoline prices. Should this fourth refinery close, there will be shortages of refined oil to the Northeast. Expect much higher prices in the future.

*Speculators of the oil futures market are buying and selling crude oil options and making extreme profits. The more speculators dabble in this market, the more the price of crude oil rises. According to an article on CNN written by Bernie Sanders (an independent senator from Vermont), 40% of the cost of crude oil today can be attributed to market speculators. 40%! This means that on average $10 (or more) of each tank of gas is going to Wall Street Speculators profits.

*An associated press article on ToledoBlade indicated that cyclically, refineries shut down facilities in February / March to prepare them for making cleaner-burning gasoline for the summer months. These temporary closures just happen to be coming at a time when many other factors are contributing to higher prices.

*The Federal Reserve has been printing a ton of money recently to pay off our rising deficit payments. Each time money is printed, the value of the US dollar decreases. This is why everything is going up in price, food as well as gasoline.

All of these factors influence the price of gasoline at the pump. It is never just one thing, and I'm sure there are a few other factors that I missed in my analysis. Feel free to add your opinions below.

So, how can you decrease your gasoline bill?

*Carpool. Create a carpool to work and to school. Have your children take the school bus if available instead of driving them to school.

*Don't Idle. Letting your car idle, or warming it up before leaving the house is wasting gasoline. Minimize your engine's idling time and you will save gasoline.

*Walk/Bike. Now that warmer weather is on the way, walk or bike as much as you can. I have a grocery store that is less than a mile from my house. On warm days, I take the kids and walk for the handful of items I need. It's great exercise and saves gasoline.

*Combine Trips. Make a list of the errands you need to run for the week. Then determine the locations of the places you have to go and select stores that are nearby for any items you need to buy that week. Go to the grocery store next to your dry cleaners this week instead of the one 3 miles in the other direction. Combining will save you in the long run.

*Change Vehicles. Many people have already done this, but analyze the cost of running your low MPG vehicle with the cost of trading that vehicle in for a better MPG vehicle (whether new or used). You can also consider a motorcycle or moped, which will get you 50+ Miles Per Gallon.

*Public Transportation. Use buses and trains instead of driving your car to work. Like carpooling, this is great for the environment and your pocketbook.

There are varying thoughts among the analysts' reports that I reviewed about whether we are on an upward swing or a downward swing relating to the price of crude oil and gasoline. No one can predict what the future will bring, but I suggest taking steps now to prepare yourself for higher gas prices. More of your take home income will need to contribute to this expense, which will also raise the price of food and electricity. Start planning now for a garden and learn how to can your own food. These two steps can be used to supplement your income to provide nourishment during these times of high prices.


Street Talk

Yep.... costs are rising all the time. In Brisbane we're paying $1.50 Litre which is about $5.70 a gallon I think. Canada is cheaper according to my husbands family over there. When we moved to Brisbane 11 years ago we refused to fill up when the price went over 70 cents/Litre. So in this time it's over a 100percent price rise. Not only that but the price here fluctuates on about a 10 day cycle (which no one can keep track of exactly) by literally 10 cents a litre (about 40 cents a gallon I think?). I filled the other day for $1.34 litre and today the prices are $1.51 litre. It will drop again. Great for motorists satisfaction!! Not! We've cut back to only one car and while that does save costs it also adds to them. When I need the car for work or whatever I have to drive my husband to the train station and pick him up again. Double the running around. Compounded when he needs to travel and leaves from the airport... an hour plus round trip!

Reply
  about 6 years ago
  

I find it interesting that you have a cycle that fluctuates that frequently. Our prices do change daily, but it's normally by a cent up or down and prior to this crazy economy, it didn't change much overall week to week. Now we see 5 to 10 cent raises and drops regularly and it's extremely frustrating. Something in this world economy has to change or we'll all be broke!

Reply
  about 6 years ago

I haven't found anyone with a good explanation for this phenomena. The outcome is very unsettled consumers! Bring up the subject of petrol prices and hear everyone go! Maybe it's driven by telecommunication companies... we're all ringing and texting each other to let our friends know when and where we've seen good fuel prices!! lol

  
  about 6 years ago

Wow AJ, how lucky you are, we pay the equivalent of $6.60 per gallon and set to rise again. In our country the price is set by the Government, and they take a bunch in taxes, so when the oil price rises, taxes rise and inflation continues to rise. The dollar/Rand exchange rate is sometimes our saviour. But rising prices never worry me, the R200 fill remains the same, the car just dose not go as far.

Reply
  about 6 years ago
  

Wow, $6.60 per gallon! I believe Canada is close to that now as is Europe. The last time gas prices hit $4 here was in 2008 and it created a downward spiral, many foreclosures, stock market crash, the Great Recession (as they are calling it here). I fear we are not completely out of it and these gas prices are going to put us further into the recession.

Reply
  about 6 years ago
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