Gas Prices Above $ 3 In All 50 States: Article Analysis

On February 17, 2014, Douglas McIntyre wrote an article called, “Gas Prices Above $3 In All 50 States.” Douglas McIntyre informs us about the different prices that range throughout various states. McIntyre uses GasBuddy as a reference and he says that gas prices below $3.15 occur to only a few states. Texas and Oklahoma are oil-producing states and even their oil prices have increased to $3.20. Today, oil prices are continuing to sell at above $100 a barrel and are likely to continue to sell at that price in the far term. There are several reasons as to why crude prices have risen and the main reason is that an extremely cold winter has affected gasoline prices. In the article, McIntyre provides a source about factors that could limit global

The supply of gasoline affects the prices by having an increase in supply results in lower prices, and a decrease in supply results in higher prices. So, a reason for our high gas prices is that there is a decrease in supply. There is a decrease in supply because there are many restrictions and U.S oil costs much more to produce. Today, most of the wells must be pumped or flooded with water to push the oil to the surface, and that makes oil production in the United States expensive. Increasing the price of oil makes oil profitable to produce by using other regions’ methods with higher costs of production. Putting gas at a high price like today would make it profitable to extract oil by using more advanced technologies and deeper wells in more hostile areas of the world. This shows how the “law of supply” plays a role in the economy. The “law of supply” states that the higher the price, the greater the quantity supplied, and that is exactly how the supply of oil is being determined today. The decrease of the supply of oil has caused prices to increase because the government needs to earn more of a profit to produce more oil. One of the reasons for our high gas prices is that there is a decrease in supply, and high gas prices would cause an increase in supply of

State and federal gasoline taxes interpret to about 15 percent of the cost at the pump, which is about 57 cents per gallon. Since California’s sales tax on gasoline is being placed as excise taxes by the federal and state governments, it sets the price high. There are also some additional taxes behind the big tax on gasoline, such as, applicable state sales taxes and gross receipts taxes. So the tax that we are paying when pumping gas all adds up to other additional taxes, meaning that the government sets the price high so that other expenses are paid for as well. We would have to look at a supply and demand curve to determine who bears most of the burden of the tax. However, since both gasoline and the supply of gasoline are inelastic, it is hard to determine if buyers or suppliers bear more of the tax burden. Taxes greatly impact consumers and they are a main reason as to why gas prices are high today in