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Soaring Gas Prices

Essay by   •  March 3, 2011  •  Essay  •  535 Words (3 Pages)  •  1,179 Views

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Supply, Demand and Pricing

Several solutions are offered to deal with the soaring gas prices but due to economic policies these solutions are not considered a priority. Society should also consider weighing the advantages and disadvantages of the possible solutions.

In the article titled, Easing Gas Rules Under Study, the main focus is the cost of gasoline, which is said to hit a record nationwide average of $2.06 during the mentioned week. The article discussed a CNN-USA Today-Gallup poll that indicated almost six in 10 surveyed expected gasoline prices would cause them a financial hardship during the summer and could cause them to drive less. In my opinion, society's financial hardship is a main concern because this will affect other industries such as, tourism, car industry, etc. If these industries struggle because society is spending less, then the industries will face a recession.

I also realize reading the article about how political policies are affecting the supply and demand for gasoline. In the same article, Commerce Secretary Donald Evans said the Bush administration is considering removing environmental requirements for a multitude of gasoline blends as one way to increase supplies of gasoline and fight soaring prices. This will enable the U.S. to import from other foreign countries; instead of importing only from countries that can produce the certain blends that we consume here in the U.S. Evans also said that another possible area for expanding supplies in the United States would be efforts to streamline the regulatory process for getting approval to build or expand existing oil refineries in the Untied States, which he said had not seen a new oil refinery in more than 25 years.

The advantages of fighting soaring gas prices would be the affects on society with their spending habits. People might not feel a financial hardship; therefore, would demand more gas and travel more. Another advantage is job security for others when oil refineries open in the U.S. Looking at the disadvantage; I feel that the major issue would be pollution

The issue is the scarcity of gasoline. Political policies that control the supply of gasoline are the main reason why there is a scarcity. In my opinion, the obvious solution is lessening the requirements on gasoline blends. I believe society is paying more for the service to make certain blends of gasoline rather than the product (gasoline).

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