Rise in Gas Price, A Surprise?
On Wed, 30 a rise in sweet crude reached a $4.58 increase. This was not expected rise in fact experts believe that prices would continue to fall because hurricane Dolly did not effect production as much as expected. The reason behind the rise was do to a decrease in supply. For approximately prices for crude had slowing been decreasing allowing the national average for regular to drop below $4.00 a gallon. A problem with dropping gas prices is that when people see $3.65 a gal they become happy and start driving more, which in turn increases the demand, which again increases the price of gas. Gas is an example of an excludable product. People have to pay for the product, no matter what the price. Also when people start to use more of the product there isn’t the same amount for others to use, which in this case makes the price rise.
4 comments:
I heard about this on WTOP,a news radio station where i live. A commentator said that it was the governments plan to make gas orices higher just to make them drop agian so that the prices would not seem expensive anymore.
I agree with you point that, when the prices go down on gas it seems like Christmas. I probably buy more gas because it is not $4.00 a gallon just because it seems like the right this to do. But if everyone does the same thing then the demand would have to increase. So i guess i should check myself to evaluate whether or not i really need it. I is usually like I should just get gas now because it is cheap and it will always go back up, which in turn the increase in consumption is precisely the reason for the price spike.
I think that the demand is going down because there are less and less gas guzzling SUVS on the roads these days. You may notice around your town that you are seeing more mopeds and motorbikes then ever before. They obviously get better milage and thusly there is less of a demand. So here is my thought. We stop purchasing these unnecessary large trucks and SUVS...there is no need for them other than to over compensate for our own short comings in life.
Yes, If people stop using large trucks and SUV's it will help, however prices will remain to rise if people don't realize they still need to use less gas. They need to realize that if the price begins to drop that doesn't mean to rush out and drive twice as much. This was the key point I was trying to explain.
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