Everyone complains about the rising cost of gas prices, and they blame it on anything from high taxes to the war on terror. What many people don’t realize is that gas prices are made up of several components, and the main chunk of cost depends on the global demand for oil, which includes how much is being used here at home.
The average cost of gas per gallon is currently hovering around $3.981. While a portion of that goes to distribution, marketing, and refining, just 12.2% goes to taxes, and the remaining $3.003 is the cost of crude oil. While taxes do play a role, we can look to our neighbors, near and far, to explain why gas is so expensive. For example, China has tripled its number of cars on the road in just three short years. Global instability (such as foreign wars) does affect oil supplies, and can increase the prices you see at the pump. The infographic below clearly outlines some of the major spikes in oil prices over the last few decades, and there’s a direct correlation between wars or disasters and oil prices.
When gas goes up by a mere penny, oil companies rake in an astounding $200 million in profits. These same oil companies enjoy tax breaks of up to $4 billion each year if they refine and distribute, which equates to an hourly of $4,700,000. The average U.S. hourly income in 2011 was just $23.16.
How can you avoid the hikes in prices? Well, you can’t really, but you can do your best to limit your use as much as possible. Rather than participating in this oil-hungry circus, turn to public transportation, carpooling, and hybrid or electric cars. The price of gas will keep going up, and the oil companies will keep getting richer. Take a look at the infographic below for more details on why gas prices are just so damn high.
Created by: Online Bachelor Degree Programs