Many factors pump up gas prices

Plenty of blame is going around for the skyrocketing prices, with much of it falling on the big domestic oil companies.

But Missouri State University economist Tom Wyrick said just blaming oil companies is too simple.

He said many factors have led to a temporarily weakened worldwide supply, while worldwide demand increases with emerging economies, such as China, using more gasoline.

“It’s kind of that perfect storm deal,” he said. “It’s not any one thing; it’s just a whole bunch of things.”

John Felmy, chief economist for American Petroleum Institute, the voice of the oil industry, said three factors have made gasoline expensive: Crude oil prices are high and are a bigger piece of the pump-price pie than they used to be, there have been costly changes in gasoline formulation that requires reduced sulfur levels and there’s a shortage of ethanol in an ever-demanding ethanol market.

“The biggest (factor) is crude oil,” Felmy said. “That’s really the biggest cost component, and it’s one that’s really less understood by the average consumer.”

Click here for the full story from April 24.