Combating Rising Oil Prices

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Finding a Solution for Constantly Rising Oil Prices
Thomas Johnstonbaugh
April 25, 2010

Although the price of oil has dropped over the past two years, global demand has significantly risen, and gasoline is still costing the public just fewer than three dollars per gallon. As of April 2, 2010, the average price for a barrel of oil in the United States is right around eighty-five dollars. This is causing a lot of people to drive less and trade in their gas hogs for smarter, more efficient vehicles. Alternative fuels and hybrids are becoming a dinner table conversation in a lot of households right now. People who cannot afford to trade up to a new car, however, are left wondering when the gas price hike is going to end. The big question everyone wants to know is why people continue to pay so much at the pumps. This is a very valid question considering the following statistic. From the start of 1978 through December of 1998, the price of oil fluctuated only a few dollars. For the most part, prices stayed right around the fifteen dollars per barrel range and actually dropped to under ten dollars per barrel at the end of 1998. Amazingly, in the twenty year period since then, the price of a barrel of oil rose almost one hundred and thirty dollars at the peak of the increase in July of 2008 (EIA, 2010). This brought on all forms of criticism from the American public and created debates about price gouging and corruption in the oil industry. The increase in the price of oil can be mainly attributed to the fact that the world’s demand for crude oil had become stagnant for many years. The United States was the main consumer that relied on oil. This has been changing, however, over the last several years as rapidly developing countries such as China and India are beginning to rely heavily on oil as well. While production of oil was at a standstill, global demand for it was rising. This caused several shortages and, in turn, caused a major...
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