...Rising Gas Prices Tabitha Walter BUS 308 Statistics for Managers Dr. Larry Pace Rising Gas Prices Each day our company sends out several vehicles to make deliveries to our customers. These vehicles come in several different sizes and fuel cost varies with each vehicle. In the year 2000 gas prices averaged $1.51 per gallon and as of May 2012 the average gas price is $3.79 per gallon. This is an increase of $2.28 per gallon in the last ten years. There is a need to look forward to the next ten years and what realize what effects the rising prices could have on our company and how deliveries should be handled. The Bureau of Labor Statistics provides detailed information regarding fuel prices each yearly and monthly. In the last ten years it shows a trend that fuel prices are on the rise. The descriptive statistics that is included below gives fuel prices from January 2002 to May 2011. Using Mega-Stats the following calculations that display the mean, max, minimum and range for gas prices from January 2002 to May 2012. Descriptive statistics | | | | | | | | | | | | | | | Jan | Feb | Mar | Apr | May | Jun | count | 11 | 11 | 11 | 11 | 11 | 10 | mean | 2.41791 | 2.47373 | 2.55455 | 2.58291 | 2.57709 | 2.48540 | sample standard deviation | 0.87457 | 0.87337 | 0.94335 | 1.00085 | 1.03673 | 1.08747 | sample variance | 0.76487 | 0.76278 | 0.88991 | 1.00170 | 1.07482 | 1.18260 | minimum | 1.123 | 1...
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...Stop Rising Gas Prices COMM/215 May 12, 2012 Stop Rising Gas Prices In 2012, the current national average for regular gas has risen from three dollars and 78 cents to more than four dollars a gallon in the last two months. What could be the cause of rising gas prices in America? Some may say that the war on terror is causing these rising gas prices you pay at the pump. Others may blame the shortage of oil. Truth be told, the government plays a tremendous role in your gas prices in America. The following paragraphs will detail the exact affects government plays on rising gas prices. Furthermore, ideas on how Americans can help fix this trend of government controlled gas prices are discussed For the past decade gas prices have climbed steeply and the pain at the pump has been no different. For every penny increase at the pump, $1.4 billion per year leaves your collective pockets, creating a drag on the sluggish “recovery.” How does this continue to happen? Who controls this and why won’t they listen to your cries? Simply put it is your government. At one time in 1979 the U.S. government fixed the price of gasoline at about $1.00 per gallon (Rockoff, 2012). So why can they not do this again? Some of you may think that the oil prices which drives gas cost to raise is because of supply and demand. That is wrong! Stiff regulations from the government and shot down proposals are the reason why you pay more at the pump. Your government is working with financial institutes and...
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...In 2005 the price of crude oil averaged $50.23 per barrel. In comparison, the average price for crude oil in 2004 was $36.98 per barrel. Fast-forward to the present, and the price of crude oil averages $77 per barrel. Additionally, taxes account for approximately 19 percent of the cost of a gallon of gasoline. In my state of Washington, each gallon of gas is taxed at 54.4 cents 1 and the average cost for a gallon of gas is $2.93 2 Even when crude oil prices are stable, gasoline prices normally fluctuate due to factors such as seasonality and local retail station competition. Additionally, gasoline prices can change rapidly due to crude oil supply disruptions stemming from world events, or domestic problems such as refinery or pipeline outages. Seasonality in the demand for gasoline - When crude oil prices are stable, retail gasoline prices tend to gradually rise before and during the summer, when people drive more, and fall in the winter. Good weather and vacations cause U.S. summer gasoline demand to average about 5 percent higher than during the rest of the year. If crude oil prices remain unchanged, gasoline prices would typically increase by 10-20 cents from January to the summer. Changes in the cost of crude oil - Events in crude oil markets were a major factor in an increase of gasoline prices for the past 10 years including present times 3. Crude oil prices are determined by worldwide supply and demand, with significant influence by OPEC who has tried...
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...Rising Gas Prices: A Better and Cleaner Earth Essay 2 Embry Riddle Aeronautical University Professor Christine Hansen English 123 May 22, 2007 Abstract The cost of gas has rapidly increased in the recent years. But what most people do not realize is that rising gas prices is a good thing. Most people see gas prices as a thing to hate but in reality it leads to major innovations. Not just better cars but a better environment. The future automotive industry is fueled by the cost of gas. If gas prices stayed low no one would do anything to change and make the future better. Rising Gas Prices: A Better and Cleaner Earth Everyone fells the pain of rising gas prices, but what most people don’t see is the good side. The more gas cost the less people will want to use it. This will lead to better fuel economy, alternate means of travel and ultimately to alternative fuel sources. Rising gas prices will ultimately be one of the greatest environmental events in the history of the human race. Gas prices have been rising for several different reasons including government regulation, low supply from refineries and low supply of crude oil. Gas prices are increasing at an alarming rate; according to the Department of Energy (2007, May 14), the current national average is $3.10. The price has increased over 43% from 2005. The price of one barrel of crud is above $60. These rapid rises in gas prices have already caused changes to the minds of Americans. According...
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...independent oil and gas companies have responded to the recent spikes and increased volatility in oil and natural gas prices by stepping up the practice of price hedging to shore up earnings and capital spending. Hedging can be a tricky practice to manage, and guessing wrong on price can do a lot of damage to a company's bottom line. The depth of the recent plunge in US gas prices caught virtually everyone by surprise, so some producers have succeeded nicely with what historically might have seemed high-priced hedges. Others missed a golden opportunity. But, in general, US independents are becoming more comfortable with the practice. While taking a breather from the wild price rollercoaster natural gas prices have been on of late, independents are devising new hedging strategies for coping with the vagaries of ever-more volatile commodity prices. Increased hedging US independents have watched natural gas prices drop from around $10/Mcf in December to about $3/Mcf in recent weeks. Oil prices also have fluctuated, as the world watches the Organization of Petroleum Countries work to maintain its targeted oil price band. Hedging is one strategy that independents use to try to lock in oil and gas prices as they strive for predictable cash flows to support exploration and development spending plans. "Companies have been doing more hedging on gas recently than they have done historically," said Robert Morris of Salomon Smith Barney. "Companies took advantage of high gas prices for two reasons:...
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...Gas Prices and the Economy The marketplace of supply and demand determines the price of fuel. If demand grows or if supply decreases, there will be an increase in pricing. On the flip side, if demand declines or if there is a surge in supply in the market, there will be a decrease in pricing. If a retailer in the market prices its gas too high without regard to competitors’ pricing, consumers will take their business to the competitor with lower prices. If the retailer loses enough business due to higher pricing, they will lower the prices to be more competitive in order to retain customers. Retailer competition affects gas pricing which can be seen by price differences on stretches of highway with multiple gas retailers. More choices generally mean more competition for the retailers. Even though many retailers carry the gasoline of major oil companies, they are independent dealers of the product and can set prices as they wish. The cost of foreign trade is contributes to the rising cost; however, many other factors contribute to the pricing of gasoline which drastically affects buyers and sellers in the marketplace. According to the Chevron Corporation, like agricultural products, such as wheat and corn, and precious metals, such as silver and gold, crude oil is traded on the world market. Recently, crude oil prices have risen dramatically, driven by rising global demand and political instability in several oil producing countries (“The Price of Fuel…”). Since crude...
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...Today’s rising gas prices is a great concern for me in the economy we are in at the moment. The United States has a national debt level over 14trillion dollars and talk from many politicians is to raise taxes to pay for that debt. With that lingering in the back of our minds we have gas prices at the front. For many of us gas is a necessity to get from point A to B for many reasons such as, work, go to school, go to the grocery store, and doctor visits. These are reasons we cannot afford to miss and therefore must buy gas. College students are the ones that are being hit the hardest with rising gas prices. The majority of college students are on a tight budget as it is. Gas is rising towards $5 and that is even before summer prices hit. College students having to pay that just to get to school on top of paying for school, is insane. Along with the great possibility of taxes rising it is even harder and harder to live comfortably. If college students did not have it hard enough with trying to handle school loans, trying to eat somewhat healthy, basic essentials and now the even bigger worry of gas. With all that is going on in the world and with our own economy the government should give at least college students with some sort of break. I recently read an article talking about how California college students have little public transportation therefore forced to buy gas. The 3million California College Student are trying to cut cost other ways. Some were not buying food and trying...
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...Reliable Sources Worksheet Locate two sources in the University Library on a topic of your choice. Provide the required information for both sources. Source 1 Author: Matt Olberding Date: July 13, 2007 Title: Rising Water, Rising Gas Prices Publication: Lincoln Journal Star Write a 100- to 150-word response to each of the following questions: Is the source reliable? How do you know? Yes this source is reliable. We know this because this source includes the author, date, title, and publication. This source is peer reviewed and was found on the University’s library. The source itself is also nationally accredited. Is the information relevant to the topic? Yes, the information in this article is relevant to the topic. We know this because he explains Nebraska is having problems such as gas prices rising. Matt also explains why the increase has happened. When a refinery of its size goes out of commission, it has a large impact on the overall prices. Does the information reflect a bias on the author’s part? If so, what is the bias? No, the information does not a reflect a bias on the authors part because it is simple article that states facts. Source 2 Author: Dayton Daily News Date: July 11, 2013 Title: Gas Prices Rising Sharply Publication: Dayton Daily News Write a 100- to 150-word response to each of the following questions: Is the source reliable? How do you know? Yes this source is reliable. We know this because this source...
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...Why Gas Prices are higher in California than in other Parts of US English 123 James L Hicks Embry Riddle Aeronautical University Abstract The rising gasoline and oil prices have become a global concern since petroleum has many uses around the world and yet its prices have continued rising for the last sixty years. This paper sought to find out why gas prices are higher in California than in other parts of America. The literature reviewed showed that West gasoline market dominated by California is defined by tight balance between supply and demand. Other factors found to be contributing the escalating gas price in California include isolation of the state from other refining centers, market conditions including international demand, Wall Street speculation, poor policies leading to uncontrolled oil cartels, decline of oil production during technical failure, political interferences, and increasing prices of crude oil due to demand forces. Despite there being no quick solution to the challenge, temporary measures such as efficient use of the available resource while looking for alternative cheaper source of energy could alleviate the challenge. Why Gas Prices are Higher in California than in Other Parts of US The Rising gasoline and oil prices have today become a world concern (Garrington, 2012). More concerns are raised considering that petroleum is an important product whose price continues escalating for the last sixty...
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...throughout the United States. Families like to take trips across country to experience the scenic routes of the freeway and discover places like the Grand Canyon, Route 66, and St. Louis Arch. Although people boycotting gasoline will not decrease the increasing price in gasoline, the demand for world oil is a cause in higher gasoline prices. Society would not be able to use transportation in vehicles if gasoline became extinct. People would have to resort to the old fashion method of transportation like riding a bicycle, walking, or creating an alternative method to mobilize their vehicles. Boycotting the increasing prices of gasoline through refusing to purchase will not lower the prices at the gas stations; however, the government has set in place a barter system to through export tangible goods with other countries for gasoline and oil. The prices of gasoline are increasing because the evolving changes of the world and the higher demand for world oil. According to “HPImpact: New research examines US trends in gasoline and vehicle use” (2007), motorists’ average mileage has gone down because the efficiencies of automotives have kept the average the United States household budgets at a steady rate despite the rising oil prices in the world....
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...Rising Gas Prices COM/215 Luis A. Garcia June 20, 2011 Pamela J. McGlynn Rising gas prices This essay will show the effects of rising gas prices and how they will be at an all time high in the up coming years. One will read various viewpoints from United States Government officials, Law officials. One will also show how this raise in gas prices will have an impact on businesses and how the consumer will be affected in the long run. Gas prices are on the raise because of unrest in the middle east and because of this it directly affects the cost we pay at the pump to fuel our vehicles. The first viewpoints come from an article published by ABC news. The article was written by Maggy Patrick and Linsey Davis, They interviewed a former executive from the Shell Oil Company this executive is anticipating that gas prices could reach five to six dollars per gallon by 2012. is the founder and CEO of a nonprofit origination called Citizens for Affordable Energy, John Hofmeister was named president of a Houston-based Shell oil company in 2005 until he retired from the company in 2008, said he predicts the hikes by November 2012 due to the increase for gasoline worldwide. He also stated: (Sloan, 2011). “While demand is rising steadily, the world is struggling to increase production. Demand is approaching 90 million barrels per day, while only 85 million barrels are being produced. Today, gas prices are averaging at...
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...Causes of High Gas Prices in the United States 27 October 2011 Abstract Prices at the gas pumps, in the United States, are forcing many to cut back on household items and other necessities, in order to be able to afford to drive to and from work. This paper will discuss the causes and effects of rising gas prices in the United States. Rising Prices The main stream media and the government would lead you to believe that the rising gas prices are a result of poor planning, greed, and too little government regulation. While those factors may play a small role in the inflated prices, what it really boils down to is the basic principles of supply and demand. The lack of alternate energy sources, the growing need for gas in other countries like China and the limited number of oil refineries in the United States keep the demand high. Since Economics teaches us that there is a positive relationship between demand and prices, we know that if the demand is high the prices will remain high. Couple this is the monopoly OPEC, Organization of Petroleum Exporting Countries, has established, allowing them to in reality, set whatever prices per barrel they choose. OPEC is responsible for over a third of the world's oil production, giving it the power to strong arm countries like the United States and Canada into paying outrageous amounts per each barrel (Carollo, 2012). When the prices do not move as they anticipate them to, they manipulate the market by creating imaginary gas shortages....
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...annual average Henry Hub bid-week prices will remain below the 10-year average through at least 2013, with some volatility, but less than that seen in 2008. As of May 23, 2012, its projection for Henry Hub bid-week price was $2.50 in 2012 (compared with $3.99 in 2011), and $3.67 in 2013. Currency issues also have an effect on natural gas prices in the US. For example, should the value of the US dollar weaken against the Canadian dollar, the costs of Canadian natural gas could rise, which would put upward pressure on prices. This could increase the attractiveness of regions where production is more expensive, thus allowing additional supplies to enter the market and potentially limiting how high prices could go. Higher consumption seen in 2012 and in 2013 In its Short-Term Energy Outlook published June 12, 2012, the Energy Information Administration (EIA) projected that total natural gas consumption would increase by 4.3% in 2012 and 2.4% in 2013. Despite the warmer-than-usual winter and the slowdown in withdrawals, the EIA believes that the increase in electric power consumption of natural gas will dwarf the declines that it expects in the residential and commercial sectors. As a result, these people ask whether limited natural gas resources should be squandered on generating electricity when other inexpensive methods of generating power exist The EIA projected, in its Annual Energy Outlook 2012 Early Release, that total dry natural gas production would rise 3.0% in 2012...
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...Introduction to Macroeconomics 5 June 2011 High Gasoline Prices Cause and Effect Hurricanes, wars and all sorts of chaos could lead to shortages in our oil supply. These shortages would bring expected higher prices. But what happens when other factors are at work? The laws of supply and demand indicate “Quantity demanded rises as price falls, other things constant”. Or alternatively: “Quantity demanded falls as price rises, other things constant” (Colander 84). For some, it is easy to blame the speculators and separate them from the laws of supply and demand. In reality, speculators only changed who purchased the future supply. They did not change the principle fact that there was a shortage, albeit an artificially created one, but still a shortage. Until 2000 US energy futures were traded only on regulated exchanges within the US and they were subject to great oversight by the CFTC in order to detect price fixing and fraud. Recently, there has been a very large growth in trading contracts that look like futures contracts and are structured exactly the same. The only difference, these contracts are traded on an unregulated market. This unregulated OTC electronic market was exempt from CFTC oversight by a provision inserted in the late hours of the 106th Congress. Enron and many other large traders lobbied congress for this passage. By buying large quantities of futures contracts and pushing the prices higher speculators have given oil companies the incentive...
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...much product or services a consumer is willing to purchase and supply is the labor or materials provided for the consumer to purchase ("Basic Economics ", 2007-2015). In relation to supply and demand some business owners efficient market theory to determine the rise of prices. According to Fama (2004-2015) “the efficient markets theory is a proposition that the prices of stocks, bonds, and other securities fully reflect all available information at any point in time” (Behind This Chicago Idea). With efficient markets theory business are allowed to increase prices of products and labor based on future predictions. If the business owners suspects any changes that will affect the equilibrium they can increase prices as needed. Business owners must make sure there is a balance or equilibrium between the supply of services as well as materials and the demand for these services and materials. If the business owners have a surplus of supplies they may find it difficult to sell all products or services and may have to lower prices of these products and services until they reach a state of equilibrium. If there is an excess of demand the business owner will find that there is a shortage of products or services and raise prices for consumers. One everlasting product that seems to fluctuate between equilibriums of supply and demand is gasoline. Gasoline in major cities are typically more expensive then in smaller towns. In 2004, people were able to fill the tanks of smaller vehicles (10 gallon...
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