Gasoline prices nationwide have jumped recently, seemingly without cause.
Geoff Sundstrom, a spokesperson for the American Automobile Association, said in a press release that the recent price increases are alarming because of the context of relative global stability in which they are occurring.
Last year at this time, the United States was entering into a war in the Middle East and prices were still lower than the current price, Sundstrom said.
Though the gas companies in the United States get the blame from many people, they have little control over pricing, said Lauren Michaelson, a junior in chemical engineering.
Michaelson participated in a co-op program at a major oil company for more than a year.
“Everybody just blames the gas companies, but they have no control over how much the crude oil costs,” Michaelson said. “I think people don’t realize that gas stations do not make a lot of money per gallon of gas.”
The price of gasoline is affected by an overwhelming number of forces, said Jack Moody, director of the energy and coastal division of the Mississippi Department of Environmental Quality.
“You have several complicated market forces affecting the price of crude oil worldwide,” Moody said. “It’s oil supply and demand.”
Rapid world economic growth and the relatively slow increase in oil production coupled with several factors connected to political relations and the status of foreign countries will cause an increase in oil pricing, said Rudy Rogers, a chemical engineering professor.
“Constrained Russian export capacity, slower future growth of Iraqi oil production and OPEC (Organization of Petroleum Exporting Countries) quota reduction all affect the supply and demand of oil,” Rogers said.
Russia and Saudi Arabia control a high percentage of the world’s oil so their decisions also heavily affect prices, Rogers said.
“Russia and Saudi Arabia control the world of oil,” Rogers said. “To maintain a market share they will adjust price and export rate. They know that if prices get too high, the world economy is hurt and oil demand drops.”
Three gasoline refineries in America have stopped operating in the past month due to fire or problems with operation, Rogers said.
“Those three shut-downs occurred during the time when refineries usually switch from producing heating oil to producing gasoline to begin building supplies to meet the peak gasoline demand in the summer,” Rogers said.
Moody said that different regions in the country cannot help each other easily because of discrepancies in each state. He said changing this could lower prices.
“Different mixture requirements in each state can restrict sharing between regions with high supplies and regions with lower supplies,” Moody said.
While it is uncertain whether prices will continue to rise short term, it is certain that prices will fall back to normal in time, Moody said.
“It’s not like this to stay, it’s just present circumstances pushing prices up,” Moody said. “Prices will come back down.”
While there is not much an individual can do to affect the pricing of imported crude oil, each person can work to affect the governmental policies dealing with crude oil and gasoline, Rogers said.
“It’s important to understand all of these factors so that you can influence the energy situation of the country,” Rogers said. “Everybody can have an impact and a say on the energy policy here because each political official has an energy policy.”
Along with affecting policies, gasoline prices can be affected by reducing the demand for gasoline in America, Michaelson said.
“All I can say is work to conserve gas. Carpool with friends, stay away from SUVs and don’t drive as much. Instead of driving back and forth across campus, walk to class,” Michaelson said.
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Students see higher prices at the pumps
Brendan Flynn
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March 9, 2004
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