How To Lower Gas Prices

Gas prices are on their way back up. Fortunately, the current rise is occurring slowly, but it raises the fundamental question of how to lower gas prices in the future.

You can’t talk about gasoline without discussing oil. Gas comes from oil, and is directly impacted by the movement in oil prices. As a result, the answer to the question of how to lower gas prices is very much the question of how to lower oil prices. The answer is found in the basic fundamentals of capitalism – supply and demand.

Oil is a non-renewable commodity. The world produces approximately 84.5 million barrels a day. The current world wide demand is about 84 million barrels a day. As you can see, that doesn’t leave much room for movement. Although prices go up and drop due to a wide variety of reasons in the short term, including speculative investing, the long term trend is up. After all, the world wide demand in 2020 is expected to be 119 million barrels a day. Nobody is really sure where the supply is going to come from to meet this demand.

So, there is really only one way to lower gas prices. We need to lower demand. The United States currently consumers roughly 19.5 million barrels of oil a day. The second closest country is China at just under 8 million barrels a day. This means the United States consumes about 24 percent of all the oil available every day in the world. This isn’t meant as a criticism, it is simply a fact. It also arguably puts the burden on us to find a way to lower demand.

The question of lowering demand is a difficult one. Entire cities in the country are designed based on the idea people can drive from one location to another. The public transportation available in much of the country is laughably bad. This presents the government with a huge problem because people cannot simply be barred from driving when there is no other option.

The best answer available now seems to involve a few different steps. The first is an effort to require vehicles to get better gas mileage in the future. The second is to encourage the purchase of hybrid vehicles and perhaps even electric vehicles. The third is to look to fuels other than gasoline to provide cars with the energy source they need. Together, these steps represent a start in cutting demand, but they hardly comprise a solution to the problem. Future development and technology will most likely provide the answer, but it is going to be a bumpy ride for the next 20 years.

Want to know how to lower gas prices? The only real answer is to lower demand. It is an easy answer, but a difficult one to put into practice.

<< Back to Gas Articles