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Question by ngocminh192003
Submitted on 6/17/2004
Related FAQ: Gasoline FAQ - Part 4 of 4
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What are the major reasons why gasoline prices increased tremendously in the 1970’s in the US?


Answer by JGMagoo
Submitted on 1/19/2005
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A group of major oil producing countries including Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, and Venezuela formed an association sometimes referred to as a 'Cartel', called O.P.E.C. which stands for Organization of Petroleum Exporting Countries. Together they decided to all agree to raise the prices they were charging the rest of the world for the crude oil they were producing instead of competing against each other and selling at a low price. The USA was, (and still is) unable to produce, or buy enough crude oil elsewhere to meet the tremendous demands of the US consumers, so had no choice but to pay the higher price demanded by OPEC. This higher price to the oil refiners had to be passed on to the US (and rest of the world) consumers in the form of higher prices for the refined product. The OPEC countries are realizing a FANTASTIC profit from these higher prices. The US oil companies are not making any additional profits because of the higher prices.  

 

Answer by Lindseyb
Submitted on 3/22/2006
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The reason for higher gas prices is because of the lack of new refineries in our countries.  We have plenty of oil we just have no where to make it all into usable fuel.  We can thank Bush for that.

 

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