Go Greener Tips

Gasoline is considered to be one of the most important things that modern society needs. Without it, people won’t be able to function normally in society. Today, we should be thankful that the gasoline prices are continuing to go down. So, why is it that gasoline prices continue on falling? What are the factors that affect the price of gasoline and other oil products?

First of all, you need to know what we pay for in a gallon of gasoline. Basically, we pay for 59 percent for the crude oil, 3 percent for refining, 25 percent for distribution and marketing and 13 percent for the taxes. Now, if you take a look at the figures presented, we only pay for just a little more than half for the gasoline.

Anyway, the price for gasoline today is now cheaper than what we had two years ago. For most people, this is really a relief as the country today is now experiencing a financial crisis. With rising price of commodities, the last thing we need is an increased gasoline price. So, just why is the price for gasoline getting lower and lower and is it still expected to get even lower?

The main reason for the low priced gasoline that we have today is the low demand for gasoline. Just last July 2008, we experienced the highest priced gasoline since 1981. Peaking at 4 dollars per gallon, people have started rethinking the way they use gasoline.

Because of what happened last July 2008, people have become more aware on how to save money on gasoline. People started organizing carpools with their neighbors and co-workers, people have started abandoning their cars for public transportation systems, and people also sold their gas guzzling cars in exchange for hybrid vehicles, which is very fuel efficient.

This is basically the reasons why demand for gasoline is very low. In fact, the demand is so low today that by the end of November, the crude inventories have jumped by 7.3 million barrels despite the fact that analysts only expected an increase of 400 thousand barrels of crude oil. And, the gasoline inventory also increased by 1.9 million barrels.

That means that the demand for gasoline is lower by 2.8 percent compared to last year that averaged at about 9 million barrels of gasoline per day. This is good news for people driving back home to celebrate Thanksgiving.

Today, gasoline price is now averaging at 2 dollars per gallon. That’s quite a lot of decrease when you compare it to what it was priced just last July 2008. This means that you can have twice as much gasoline for the same price you pay today than compared to just 5 months ago.

If people continue on saving money on gasoline, you can expect that the price for gasoline will still fall. However, if the demand increases and gasoline reserves dwindle, the price will go back up again. Almost everyday, you will see that the gasoline price continue on falling. Because people are still skeptical that the price trend will continue on like this, they start panicking and filling up their cars. They are afraid that the price will go up.

So, despite the fact that we are experiencing a global financial crisis, we should still be thankful of the fact that the gasoline price today is at an all time low.

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