Tuesday, March 15, 2011

Gasoline Prices: How High Can They Go?


Gasoline prices have been everything but stable during the past few years. Since early 2009, Nevada residents enjoyed gas prices at or below $3/gallon. Because of the unrest in Egypt, Libya, and potentially Saudi Arabia, fear of oil supply disruption pushes market prices higher.


According to the United States Energy Information Administration, the end cost of a gallon of gasoline has increased due to crude oil price spikes, while taxes, distribution & marketing, and refining have remained relatively fixed. Time will only tell if the short-term unrest in the middle east calms or becomes even more escalated. In the long-term, we can expect a steady increase in the price per gallon as the population in the modernized industrial world increases and fuel alternatives remain economically inefficient.


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