As the price of gas continues to climb, many ask why.
“Gas prices right now are high because there is a shortage of the product to begin with.” says Mark Whitehead, President of Whitehead Oil Company.
Whitehead says there are a number of reasons for the gas shortages.
“OPEC has decided to tighten some of their production costs likewise the value of the dollar since it is traded on the worldwide market, that dollar likewise has had an impact to it.” says Whitehead.
Here’s how AAA’s Marilyn Muir breaks down the high rates. “The wholesaler is buying the gas for a $1.33 a gallon.”
She says by the time you add on federal and state taxes you’re already up to a $1.77 a gallon. Then local retailers and wholesalers add on transportation taxes, their overhead and their profit, which brings us to $1.99 that we’re seeing right now. Experts say those high prices will be around for a while.
We import over 60 percent of crude oil from overseas, making the U.S. extremely dependent on foreign sources for oil. One option to alleviate these high gas prices is to use domestic sources.
“The studies I have seen prove that it can be done in an environmentally friendly basis, and the more we can find domestically, the more that pressure is going to be relieved,” says Whitehead.
Marilyn Muir of AAA here in Nebraska has some gas saving tips: