Reasons why petrol prices are high
The rising price of fuel is not due to external forces, such as international competition or supply and demand, but rather internal factors within the oil industry and the market itself.
Petroleum products are made up of three main components: petroleum crude oil, gasoline and diesel. Crude oil is the raw material from which both petrol and gasohol are produced.
The cost of this crude oil comes down to two things – how much it sells for per tonne and how many tonnes there are in total. The first is related to the current market situation whereas the second is more fundamental and will remain stable unless something changes.
Crude oil production has been steadily increasing over recent years, with most of this growth coming from China and Saudi Arabia. There are now just about everywhere around the world you can go look for oil, especially in developing countries. This means that available barrels are growing faster than our need for them!
At present, there are just about enough oil resources left to meet global demands for several decades. However, we have reached a tipping point where either we manage the remaining supplies very carefully, or they run out completely.
This would be disastrous for almost everyone and everything dependent upon fossil fuels for energy. We could see riots and unrest on an unprecedented scale. So far governments and industries have managed to keep the lid on, but only by using ever-larger amounts of oil.
The causes of the recent petrol price rises
Recent increases in New Zealand’s fuel prices are due to several different factors. In this article, we will talk about some potential reasons for the cost increase. We will also look at what you can do to be more energy efficient so that you use less gas money!
The first reason why petrol prices have increased over the past few weeks is because people all around the world are buying oil.
This is because there is a lot of interest in investing in oil companies. People like the investment opportunity they offer, or believe that owning shares in an oil company is the best way to protect your wealth from inflation.
Another cause of rising petrol costs is the growing demand for diesel in countries with high car usage. Diesel cars are much cheaper to own than gasoline ones, which means lots of people are choosing them instead of spending the same amount on petrol to get the same performance. This is particularly true in Europe where taxes on diesel are lower.
