Analysis on how gasoline prices are determined Term Paper

Analysis on how gasoline prices are determined - Term Paper Example The world’s challenges are to keep production going at a constant rate, and try to increase. At the same time, producers, with assistance from OPEC and respective governments have to keep high inventory levels to offset a period of zero production. Furthermore, the governments of various countries should consider allocating a heavier budget to oil exploration. In my opinion, the price of gasoline would increase, at least in the foreseeable future. Although the world is undergoing a severe recession, the prospects for recovery and growth are high, and consumers would be confident of a quick recovery. Furthermore, the proposed changes such as full capacity utilization would take time to accomplish. Also, the political tensions in the Middle-East look to intensify in the near future and that can disrupt supply. Even with the technology that is available, adapting to other forms of energy would be a difficult task for businesses and individuals alike. For instance, if CNG is used, it would take some time before America and other countries have easy access to CNG, since investors won’t take a risk of opening too many retail locations. All in all, I feel that the future can be bright and crude oil can be utilized to the fullest cheaply, but extra effort would have be exerted by governments to regulate the price of gasoline.