Gas prices continue to skyrocket, who's to blame?
Jason Lewis/Special to the NNPA from the Los Angeles Sentinel
Issue date: 6/22/08 Section: Politics
LOS ANGELES (NNPA) - The next time you're pumping gas you may want to look away from the meter. Especially the price slot. Filling up a 20 gallon tank on a SUV would cost over $85 with the prices this past week. If anybody sees gas for under $4, please contact the Sentinel offices.
So who is really the bad guy here? It is certainly not the gas stations, which do not have much, if any, control over gas prices. The major oil companies own less than 5 percent of gas stations in the nation. Small retailers own most gas stations. A number of local gas stations are charging more than $4.50 per gallon for 87 Octane, but they are lucky to break even on gas sales.
Most gas stations do not make a profit on their gas. If there is a profit it is not much. After overhead and credit card charges gas stations owners are happy if they did not lose money on gas sales.
Owners of gas stations use gasoline to entice consumers to buy from their convenient store or repair cars at the service station attached to the gas station.
The biggest factor for these outrageous prices is the skyrocketing prices of crude oil, which was only $45 a barrel in 2004. Now the price is a record setting $135 a barrel.
We were complaining earlier this year when prices were in the range of $3.15. Now we are longing for those days. As long as the crude oil prices continue to rise so will the amount that we have to pay to fill up our cars.
So why are crude oil prices so high? It could be the falling dollar, or it could be because of wars in countries that supply oil. Most likely both are to blame.
Oil is priced in U.S. dollars, and the weaker the dollar gets, the more attractive dollar-denominated oil contracts are to foreign investors.
"One of the big problems with gas right now is that the value of the dollar on the world market has dropped nearly 50 percent," said Rod Wright, who recently won the race for the 25th State Senate District seat. "The barrels of oil are measured in dollars. The fact that the dollar lost its value, that's almost half of the increase in fuel prices."
So who is really the bad guy here? It is certainly not the gas stations, which do not have much, if any, control over gas prices. The major oil companies own less than 5 percent of gas stations in the nation. Small retailers own most gas stations. A number of local gas stations are charging more than $4.50 per gallon for 87 Octane, but they are lucky to break even on gas sales.
Most gas stations do not make a profit on their gas. If there is a profit it is not much. After overhead and credit card charges gas stations owners are happy if they did not lose money on gas sales.
Owners of gas stations use gasoline to entice consumers to buy from their convenient store or repair cars at the service station attached to the gas station.
The biggest factor for these outrageous prices is the skyrocketing prices of crude oil, which was only $45 a barrel in 2004. Now the price is a record setting $135 a barrel.
We were complaining earlier this year when prices were in the range of $3.15. Now we are longing for those days. As long as the crude oil prices continue to rise so will the amount that we have to pay to fill up our cars.
So why are crude oil prices so high? It could be the falling dollar, or it could be because of wars in countries that supply oil. Most likely both are to blame.
Oil is priced in U.S. dollars, and the weaker the dollar gets, the more attractive dollar-denominated oil contracts are to foreign investors.
"One of the big problems with gas right now is that the value of the dollar on the world market has dropped nearly 50 percent," said Rod Wright, who recently won the race for the 25th State Senate District seat. "The barrels of oil are measured in dollars. The fact that the dollar lost its value, that's almost half of the increase in fuel prices."
Be the first to comment on this story