Causes, Effects of High Cost Gasoline (Essay Sample)

Causes, Effects of High-Cost Gasoline
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Causes, Effects of High-Cost Gasoline
Gasoline is a refined product consisting of various ingredients usually hydrocarbons. Gas derived in oil contains 150-1000 parts where ethanol is one of them. Gas function as a fuel for engines which consist of mostly of organic compounds obtained by a process called fractional distillation of petroleum enhanced with a variety of additives. Political instabilities and corruption have both active and negative implications of economic growth and cause high cost of gasoline.
The increase in demand for gas, especially from developing countries and fear of supply disruptions, have culminated in the rise in the cost of gas and these due to rapid growth of developing nations such as China and India. The economies in the whole world have become industrialized and urbanized, and these have contributed to an increase in the global demand for gasoline which has lead to a rise in the cost of gas.
Political instability in oil producing countries such Nigeria, Venezuela and Iraq have caused a reduction in the supply of gas due fear of supply disruptions, and these have lead to rising gas prices. Traders bid the price of gas and these allow investors to buy oil for future markets and these leads to increase in the price of petrol. The oil price accounts for 72 percent of the gas prices and. Therefore, high prices of crude oil lead to the high price of gas.
High taxes on gasoline when selling, importing or exporting and also in oil producing companies have lead to increasing in the price of gas. Also hindering the construction of XL pipeline in U.S and choking off production of petroleum in the Gulf of Mexico by President Obama has lead to increasing in oil price.
Rising of gasoline prices has caused many implications including speculations commodity markets has grown, and these have played a role, and these have evidence in increased markets activities. Gasoline price increase causes an increase in inflation where oil directly affects the cost of goods made from petroleum products and also reduces economic growth. Also high price of gas affects transportation, manufacturing, and heating indirectly such as high cost of transport
The high cost of gas can influence the price of goods and services as productio...