Potential reasons for the increase of gas prices Essay

Potential reasons for the increase of gas prices - Essay Example It is not believed by everyone, but it is a fact that the total quantity of crude oil is not utilized for the production of gasoline. Gasoline is produced by converting only fifty-one percent of an oil barrel. Subsequently, heating oil, jet fuel, refinery gas, and a number of other oil products are produced by rest of the oil barrel. In the result, the role of a high demand commodity is played by the oil, and as oil is not produced by most of the countries, import of oil has been a regular and necessary practice in most parts of the world. (Jaffe, pp. 23-25, 2006) This also results in the increase in the high prices of the oil and gas around the globe. Thus, fluctuation of prices can vary due to the demand and supply of different countries in a global oil and gasoline market. For instance, a flourishing economy has been represented by China, which has resulted in its high requirement of oil, as compared to its oil and gas requirement in the previous years. In the result, crude oil becomes shortage due to an increment in its global demand, and consequently, gasoline, jet fuel, lubricants, and prices of similar products become high. Therefore, increase in the demand of oil in a stabilized and economical country can affect the price of gasoline in other countries of the world. Thus, fluctuation of oil demand and supply is another potential factor that results in the higher prices of gasoline and other oil products in different regions of the planet.