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Create a 6 page essay paper that discusses Gasoline Prices.Increased fuel prices forces American society to find alternative energy sources and motivates the government to invest more into research an
Create a 6 page essay paper that discusses Gasoline Prices.
Increased fuel prices forces American society to find alternative energy sources and motivates the government to invest more into research and development of the cars with less fuel consumption and improving efficiency of the refinery sector.
Crude oil prices have the major impact on gasoline prices.
Other factors include refinery capacity in the country, gasoline inventories maintained by refiners which is going downward, regulatory environment (national air quality standards), and the structure of the gasoline market. It is important to note that mergers lead to anticompetitive effects because more power is given to merged companies who are able to increase prices above competitive level. The first wave of mergers has started in 1990s in US when several competing with each other companies have merged. More than 2,500 mergers have occurred at that time - since 2000 only 8 mergers have occurred involving different market segments (exploration, production, and transportation) (Energy Markets: Factors Contributing to Higher Gasoline Prices, 1).
Refining capacity in the United States is not expanding at the same rate as demand for the gasoline. The American average refinery capacity is 92 percent - as the result, there is no room to expand production (Energy Markets: Factors Contributing to Higher Gasoline Prices, 1).
