The Rise and Fall of Automotive Fuel Prices 2014-2015

Ridiculous, is the rise and fall of automotive fuel in North America/the World, where the OPEC nations have decided to flood the world market with their oil, thus drastically reducing prices. The repercussions, surprisingly, are markedly in the favour of the OPEC nations.

The World is addicted to crude oil, which, when refined runs our cars and trucks. As the world consumes oil, it has become harder and harder to find replacement oil to fulfill our needs. The OPEC nations still have lots of it, and therefore have no fear of running out any time soon. As the price of crude has risen, new and more expensive sources of crude have been discovered. This has worried the OPEC nations. Their solution is to flood the market with their crude oil, thus reducing the price per barrel. The interesting slant on the subject is that while the lower price of crude does initially benefit the end consumer, by increasing supply and therefore lowering the price, the higher priced but alternative sources of crude become increasingly unprofitable. These sources will eventually go out of business. Once these alternative sources of crude are gone, the OPEC nations will have their oligopoly back where it was in the past.

Predictably, North Americans have not taken advantage of lower crude prices aswe logically should. While we all know that lower crude prices are temporary, should not we, as a society, continue to look for more efficient ways of using this scarce natural resource? Yet this has not happened. North Americans have taken this opportunity of lower oil prices, to use this savings in order to purchase bigger cars and trucks, rather than keeping the savings and continuing to buy fuel efficient cars. This seems to be such a short term viewpoint, but how can we convince the general public to still follow the efficiency path? I do not know.

Obviously the logical viewpoint has failed to grasp the general public. As a result, the general public has bought vehicles that are larger than before the OPEC flood, thereby compounding our reliance on oil.

It seems like a win-win solution for the OPEC nations. They give up short-term profits by reducing their natural resources, but in turn, they allow the addiction to their oil to persist. Not only do they continue this addiction, but they also eliminate the competition for alternative sources of oil and energy. By eliminating research and development of these alternative fuels sources, they encourage the world’s reliance on their oil. It seems like a brilliant plan, all dependent on the short-term viewpoint of North Americans and their propensity to consume oil.

Are we that gullible? Are we that short-term? Yes, we as North Americans very much are, sad but true.

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