Although gasoline prices in the US are not the highest relative to many other countries, higher gas prices do impact the financial conditions of American citizens in many ways. How can we lower gas prices - this is probably the most critical question that is giving sleepless nights to economists, policy makers and the Average Joe.
Gasoline Prices: A Self-evident Disparity
In 2010, that is during last year, the price of gasoline in the US was nearly $2.71 per gallon. In the start of 2011, it fluctuated and in June 2011, it jumped to a national average of $3.70 a gallon. If the worst is to be predicted, we can say that gasoline prices will cross $4 per gallon, in the coming months. Now consider this - World-class luxury cities like Norway (Oslo) and Amsterdam (Netherlands) charge nearly twice or thrice the price a US citizen pays for a gallon of gasoline! These countries impose heavy taxes on their citizens for using fuel. Similarly, in Middle Eastern countries, say Saudi Arabia, oil is majorly produced by government entities and so the gas prices are low, as the benefit of common man is kept in mind. The tremendous disparity in gas prices all across the world is a complex thing to understand.
Reasons to Lower Gas Prices
The US is one of the biggest consumers of oil products in the world. If gas prices shoot up, it affects the life of the citizens, as they are forced to adjust their monthly budget likewise. For instance, if in 2010, you had to put $100 worth gas in your SUV, this year, you may have to put couple of dollars extra. It can be another $10, $20 or $30 dollars more in 2011. The increased expenditure on fuel prices will obviously be adjusted by you by adopting some cost-benefit analysis methods. You will cut you cable television cost or telephone bill or you may have to give up the luxury of dining out with your family in your favorite restaurant. So that's the main reason for lowering gas prices. It invariably comes heavily on your pocket. You may try several tricks and techniques to cut back on your fuel prices but higher fuel costs are always a pain in the neck. High crude oil prices invariably leads to higher gas prices and when you combine everything, the gas prices affect the economy, invariably and quite significantly. So who do we turn to, when it comes to the question: how to lower gas prices. Obviously, the US government.
Ways to Lower Gas Prices
Gas prices rise due to numerous reasons right from the abrupt drift in demand-supply to the national and international politics on the crude oil prices. How can we lower gas prices? What can the government do about it? What can a driver do about it? Here are some simple perspectives.
Choose Greener, Fuel Efficient Cars
It is in there and is becoming a norm now. With automobile companies in the race of launching more fuel efficient cars, it is great news for consumers who can choose high fuel efficient vehicles and cut back on their fuels. Even the Congress has passed bills for auto makers to revamp their fuel efficiency standards and make life easier for consumers. So what you are waiting for. Start researching for the greenest cars in the market.
Biofuels, a Great Alternative
It can't be denied that biofuels obtained from ethanol cane ease the burden on gasoline consumption. The problem that arises is that production of biofuels on a large-scale is not a simple task and requires tremendous technological breakthroughs, that hasn't been achieved yet.
Be a Responsible Driver
If you don't know what I'm going to inform you, then do a little research on the Internet. Your driving habits can significantly save you few liters of gasoline. It is a scientific finding by experts that driving slow (in safe speed limits) helps in less consumption of fuel. Similarly, by keeping your SUV or car in best condition, cleaning the air filters frequently and maintaining it well, you can help in saving at least some amount of gasoline. Imagine if the same effort is put by millions of drivers across the US. It's simple mathematics. The demand of gasoline will eventually drop and prices will be manageable. It may seem hypothetical but remember it is not just about you as a driver. Millions of drivers across the US, if save a gallon of gasoline every month, it can add up to millions of gasoline gallons! Even a 1% or 2% drop in gasoline demand can be quite significant.
Produce More Oil
If more oil is drilled in the US, it can help in lowering of gasoline prices. The possibility of such a scenario though seems unlikely, as the US doesn't have sufficient reserves of oil to cause ripples in the world oil market. So theoretically, it may appear that if more oil is drilled in the US itself, in the controversial Alaska Wildlife Refuge, it can help in lowering gas prices. However, practically, it is seems there won't be much benefit as the demands in US are quite high.
Give Tax Benefits
The government can plan to give tax benefits to consumers on gasoline that can eventually help them manage their budget properly. But again the issue of filling the gap of tax short fall will have to be covered up by something else. Another way of lowering gas prices that has gained media attention in the recent few years is by imposing carbon taxes, that is increasing taxes on gasoline consumption. In the political circle, however, this step hasn't been promoted to a great extent as there exists a common belief that citizens won't agree to pay more taxes, when prices of other commodities are already higher.
Gas pricing is directly dependent on crude oil prices which is pretty much controlled by the group of OPEC countries. International diplomacy and politics coupled with economic factors plays a significant role in rising or lowering gas prices. As we all juggle between the fluctuating gas prices, we must learn to prioritize our lives based on the current gas prices. That is the least we could do in the tussle between gas prices and our budgets.