What affects The Gasoline Prices

By Wayne Truter

Rising gasoline prices may just make other forms of alternative means of transportation become more attractive. One of the ways not to be affected by the rising prices of gas is to have an alternative means of travel. Of course, saving up on gasoline use may help in some way, but such actions may still leave one affected with the rising prices of gas. A better way would be trying to use a mode of transportation aside from one that makes use of fuel aside from gasoline. One such example is the use of an electric car.

As the sudden rise in gasoline prices have made people become more concerned, it would also be very important to know about the different factors that give rise to such increases in the first place. There are four main elements that affect the pricing of gasoline in the retail market, primary of which is the price of crude oil in the world market.

Crude oil is the initial raw material from where gasoline is refined and derived from. Crude oil, a majority of it, is sourced and supplied from Middle East countries. It is these countries that have control over the price of crude oil in the world market. Countries that get their crude oil supply from these oil producing countries are the most affected by the sudden increase in crude oil prices. Overall, crude oil pricing affects about 75 percent of the price tag for gasoline in the retail market.

Performance-wise, electric cars offer smoother and noiseless operation that cars relying on gasoline. Electric cars provide stronger acceleration and the electric motor requires lesser maintenance than the internal combustion engines of cars using gasoline and other fossil fuels. By using electricity through batteries, energy conversion is more efficient. Electric motors makes use of 75 percent of the chemical energy converted into electricity to run the car. Internal combustion engines or ICE's only are able to make use about 20 percent of the energy stored in gasoline to power the vehicle.

Aside from distance from supply, retail prices of gasoline may also be affected by environmental programs and local regulations being followed in a certain area. There are certain areas, countries or states that require gasoline to be specially formulated to meet up with certain local standards. This is usually done in order to protect the environment. Certain regulations require that refined gasoline be further reformulated in order to help reduce pollutants to be released into the air. This might require adding up certain chemicals in order to help reduce carbon monoxide emissions as well as other pollutants when gasoline is being burned. In order to meet up with certain regulations of certain states and countries, such processes must be additionally performed and therefore may add up into the retail cost of the reformulated gasoline. Another big factor of retail gasoline prices being different from one area to another is because of competition. Whenever there are quite a number of retail gas stations to choose from in a certain area, the likelihood of gasoline prices being cheaper there is high. The primary reason is, of course competition. With many retail gas stations trying to share the local market with other retail stations, getting customers attracted is important. The most effective way to do this is by trying to offer cheaper gas prices than the competitor.

With the appearance of the more powerful and affordable diesel and gasoline powered cars starting in the early 1900's, the market for electric cars slowly disappeared. Although there were still electric cars being made, those that do exist were being produced for specialized applications. One of the most common use for the electric vehicle today may be found in the golf carts as a primary mode of compact transport in golf courses. But because of the rising gasoline prices as well as the worsening pollution, there has been an renewed demand for the less polluting alternative electric vehicles in recent years. And will this rising casoline prices effect cars quotes in the future? - 21392

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