Gm545 Project 1

Every year around this time many people wonder the same question, why do gas prices fluctuate? There are millions of articles, blogs, news reports and people complaining throughout the world about gas prices. People really want to know the answer to this question and unfortunately there is no clear cut answer. After my research one thing that seems constant is that the gas prices are rising but the amount of increase is not consistent throughout the country. Even within the same state the gas prices varies. I leave out my house and the gas is $4.29 per gallon. I drive 4 miles to a suburb and the gas is $3.83 per gallon. I drive across to the neighboring state and the gas prices are $3.69 per gallon. I live in the city of Chicago, IL and every year the city is voted to have the highest gas prices in the country. When I saw the first question it was a no brainer because I really want to know why our gas prices top the national average. I am going to discuss the factors that affect the prices of gas around the country and focus on the city of Chicago.

There is no one factor that contributes to the rise of gas prices. The fluctuation of gas prices can be contributed to a combination of factors. Some of the factors that have been seen throughout my research are the price of crude oil, increase in demand, distribution network breaks, refinery capacity, and taxes. The Oil Producing and Exporting Countries (OPEC) determine how much oil to produce and distribute. OPEC attempts to stabilize the prices of crude oil but the supply has stagnated and the demand has increased. Not to mention that the U. S dollar has lost some value; therefore causing OPEC to raise prices because oil is traded on the World Market in U.S. dollars. There have been a few natural disasters that have affected the prices of oil one recent one was Hurricane Katrina because the oil is refined in the Gulf Coast. Hurricane Katrina would be considered a break in the distribution network as well as...