Why Are Gas Prices So High

Gas has become one of the most important utilities in human life and there is an increase in the demand of gas in order to output more products and services. Gas plays an important role in the expansion of economy as trade, transport, industries, household etc are dependent on this commodity to function efficiently and effectively but in prevailing times it has become very expensive. This rise in gas prices is not due to the gas companies, but there are several other factors that play a vital role in controlling gas prices. So to understand best why the gas prices are high we will have to look into all these factors.

Improving Oil Demand

There is a high demand of gas not only in the developed countries such as the United States of America and the European countries but there is a great demand of this commodity in India, China, and Middle East etc. Economy of any country boosts if industries are set up and run efficiently and that is possible only if there is ample supply of gas. In order to improve their economy countries such as the Middle East where there is abundant supply of oil the government prioritizes keeping it for their industries rather than selling it off to other nations. This increase in demand of oil and less supply available is one of the factors that plays an important role is the rise of gas prices.

Gas Prices Why Are Gas Prices So High

Supply Problems and Geopolitics

Geopolitics is another factor other than the supply problems that plays a vital role is the rise of gas prices. Due to several reasons there is a conflict between different countries of the world that affects the supply of gas throughout the world. When war was imposed on Iraq it resulted in a noticeable rise in the gas prices and the rebel activities in Nigeria also had an impact. Thus we can say that both national and international conflicts affect the supply of gas. A similar example of such a scenario is the allegation of development of nuclear weapons in Iran. The supply of gas was also affected when the oil companies in Venezuela were nationalized.

It should be noted that higher the prices of crude oil, higher will be the price of gas. When the cost of production is high naturally the prices of crude oil will also be high in the world market. Oil companies have been forced to move from America since the oil sources dried out to areas like Gulf of Mexico where the production cost is considerably high.

Due to ever increasing industries all around the world and an even more growing demand of oil, most of the oil in the ground has been used up and according to the oil companies only a limited supply of oil is left in the ground and there is a need to device new methods to find new sources of oil in the ground.

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