Why have gas prices been rising?
According to a July 2005 report from the U.S. Federal Trade Commission: “First, in general, the price of gasoline reflects producers’ costs and consumers’ willingness to pay. Gasoline prices rise if it costs more to produce and supply gasoline, or if people wish to buy more gasoline at the current price. Gasoline prices fall if it costs less to produce and supply gasoline, or if people wish to buy less gasoline at the current price. Second, how consumers respond to price changes will affect how high prices rise and how far they fallÖ.Consumers can change their driving habits, walk, ride a bike, take the bus or the subway, or eventually buy more efficient vehicles, but these are difficult choices. “Third, how producers respond to price changes will affect how much prices rise or fall. In general, when there is not enough product to meet consumers’ demands at current prices, higher prices will signal a potential profit opportunity and may bring additional supply into the market.” óU.S. F
