Why Are Gas Prices So High? Is It Greedy Oil Companies?
Fact: Gasoline Prices Are At An All Time High
They are going to get higher. But why? Many factors affect the price of crude oil, and ultimately gasoline. One major influence is the economy. The US economy is weak (understatement of the year right?) and because of this weakness, and the dollar losing ground, people invest in crude oil as a “hedge”. When the dollar falls, things like crude oil, gold, silver, etc. become much more valuable. Oil prices make up about 80% of the price of a gallon of gasoline, and those prices have increased about 20% because investors are funneling money into commodities.
Believe it or not, the refineries are struggling to make any money at all. They get blamed sometimes for the prices, but as I have stated above, the prices are influenced by investors, and the companies that own the actual oil. The refiners are making about 6 dollars from every barrel of oil they process, when about a year ago they were making 35+ dollars per barrel. They currently are only operating at about 85%, but I ask you where is their incentive to increase throughput when they can’t turn a profit. So who is making money? BP, ExxonMobil, Chevron, etc. Thats where most of the profits go, and that is who is stuffing their proverbial pockets full of our hard earned money.
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