Every consumer is looking to his or her wallet and bank accounts and wondering where all of their hard-earned money is going. The answer is plain and simple – Gas! Gas prices have slowly begun to hurt families financially; including my own. Families are taking drastic measures to make ends meet to ensure their automobile is topped-off each week. For the past several years, the Nation’s economy has seen a steady incline in gasoline prices. This essay will examine the factors that play a significant role contributing to the increasing prices.
Why are gas prices so high? One of the top reasons for the increase in prices is the supply and demand for oil. Crude oil accounts for 55% of the price of gasoline, whereas taxes and distribution control the remaining 45% (Amadeo, 2011). Typically, taxes and distribution are steady, so that the daily adjustment in the price of gasoline correctly reflects oil price fluctuations. However, occasionally, distribution lines are interrupted or are down for maintenance, which can oftentimes result in high gas prices even when oil prices are down (Amadeo, 2011).
I currently work in the District of Columbia, and like most locals here, I commute to work every day in order to afford a home within my families means. With gas prices reaching a record high, beating out the average of $4 per gallon back in 2008 (Amadeo, 2011), I find myself filling up my tank twice a week for $4. 13 per gallon. The increase in gas prices has recently only affected my family in several ways. To afford the spike in gas prices, my family has had to cut back on eating out at restaurants, visits to the movie theater, and stretching our groceries for the month to ensure we have money for gas.
I interviewed several of my coworkers to determine how gas prices have been affecting them. Although others are still choosing to drive, some have decided to park their car and settle for alternate means of transportation such as: public transportation, riding a bike, or walking. Although a solution for some, alternate modes of transportation are not always the most logical solution; particularly for those who reside in rural areas, like myself.
Residence commuting from rural areas run into transportation barriers and gas prices tend to play a major part in their lives. Studies show that rural households spend five percent of their total income on gasoline alone. In comparison, urban families will only spend three percent of their total income (Bookrags, 2006). In the end, the bulk of the Nations population are those who are distressing as a result of the lack of alternative transportation, fuel alternatives, and in the end will pay the most toward gas prices.
Rural areas are deficient in what a busy city or municipal is heavily populated with. Buses, subway systems, and mass transit are not available in rural areas; and consequently, those are the areas paying out hundreds of dollars on gas each week. The additional cost pulling from an income could simply be used to feed a family. Then again, are we even feeding our families? Most Americans have started to rethink their finances by cutting corners when purchasing groceries. Are cutting those corners saving families money?
With the rise in gas prices, a business is are forced with raising the price of food to help compensate product transportation costs (Edwards, 2011). As if gas prices are not enough, lawmakers have begun to kick around the idea of charging motorist a driving tax. The law, if passed would either add to the already existing tax consumers pay toward gasoline or possibly, add to it. The law would charge motorist by the mile and the money collected would go toward fixing highways and infrastructures. The cost to motorist would depend on how much the government wanted to raise (Hargreaves, 2011).
Families residing in rural areas would be affected the most by this change because those families generally commute the longest distances to and from work. It appears the recent gas price spike will not be backing down anytime soon. In order for us all to survive, we must learn to change our lifestyle. A bit of advice would be to shop around the area you live in for the cheapest gas prices before filing up (Save on Gas Prices, n. d. ). I can still remember the days when I was paying $20 for a full tank of gas. Granted that was over 20 years ago; it is still a nice thought!