1. Rising Gas
Prices 2012
Will Gas Prices be a
factor in hampering
our recovery?
By Richard Ngo
Can there be $5 a gallon on this
gasoline sign?
___________________________________
May 2012- Michael
Caruso, a florist from
Washington DC, says that
he pays 25% more to fuel
his trucks to deliver
flowers to his customers.
“Freight costs have really
gone up and they are
affecting us that way”, he
says. Meanwhile,
motorists like Jorge
Granados find it very
difficult to keep up with
the price of driving. “This
is the first time I’ve paid
$75 for a tank of gas”, he
says. For producers, they
need a vehicle and a road
to deliver products and
services. The people
depend on them to
receive these goods.
However, the price of gas
goes up, and the
producer spends more
money for gas. There’s
less money available for
other inventory. The
producer now needs the
consumer to spend more
money in order to keep
the products coming.
Therefore, their
individual budgets will
be severely cut or
modified. So, what is
causing gas prices to go
up lately?
___________________________
''Freight costs
have really
gone up and
they are
affecting us
that way.''
- Michael Caruso
___________________________
Background
In America, Gas
and other types of fuel
are primarily used for
transportation needs.
Businesses use fuel for
their trucks to deliver
products to people. That
is why businesses
depend on more
production of gas and oil
within the country to
meet their demands.
However, prices go up
because the demand is
still there, but oil and gas
are not being produced
enough. If this continues,
they affect the ticket
fares on trains and buses
because operators rely
on fuel to operate these
machines with power.
Without it, fares go up so
that money can be used
by the transportation
agency to get more fuel.
So, what problems are
causing higher demand
and less production?
Causes/Tensions
One cause is the
oil industry continuing to
desire for more profit
from producing other
types of oil rather than
gasoline. The price of
petroleum went up
continuously. There were
tensions and unrest in
Libya and Syria. Yemen
had unrest in the Arab
Spring. Finally, there
were tensions in Iran
over its nuclear weapons
program and its threat to
close the Strait of
Hormuz, which produces
20% of the world's oil.
These tensions have led
to no production of oil or

2. gas for a long period of
time. So, what's the
latest?
The Latest on the
Situation(2012)
As of May 2012,
Gas prices have
continued to decline. This
is due to more oil and gas
production in America,
and this leads to less
demand from developing
countries. Also, the
Middle East has now
begun to ease its
tensions. On 5/3/12, Gas
is only at $3.80/gal.,
according to AAA. This is
good news only for now.
However, is there a
solution for the long-
term?
Gas prices have been on a never
ending roller-coaster.
'' This is the
first time I've
paid $75 for a
tank of gas.''
- Jorge Granados
Possible Solutions
According to the
National Wildlife
Federation, one solution
is to increase fuel
economy. New fuel
economy standards set
by the U.S. government
will bring a car or a truck
have a fuel efficient avg.
of 54.5 mpg by 2025.
Fuel expenses will be
saved by 40% in 2030.
Also, more innovation
needs to be included in
vehicles. Cars should
have electricity instead of
gas. That way, when the
price of gas goes up,
people won't have an
economic burden, and
still save more. Modern
infrastructure should be
built. Finally, we should
stop oil drilling, tap dirty
fuels, and end oil
subsidies for the most
profitable companies in
the industry today.
Conclusion
As we continue to
analyze the crucial
relationship between
producers and
customers/consumers,
it's important to keep the
economy going and to
save money. If
developing countries
continue to produce
more oil in the long term,
then demand will be met.
This will drop Gas prices
significantly. This is a
needed and lasting effect
for drivers today.
For Additional
Information
National Wildlife Federation.
‘’Taking Control- Real
Solutions To Rising Gas
Prices’’. www.nwf.org , March
2012.
Nerurkar, Neelesh and Pirog,
Robert. ‘’Rising Gasoline Prices
2012’’www.fas,org , March 1,
2012.
Reeves, Benjamin. ‘’ Gas Prices
Rising 2012: Diesel Exports
May Drive Them Higher’’.
www.ibtimes.com , March 29,
2012.
White, Ronald D. ‘’Analysts:
Brace For Record Gas Prices in
2012’’.www.latimes.com,
November 8, 2011.