Oil and Gas 2
There are many issues that cause the cost of oil and gas to increase. The main contributing issue to the increasing cost of oil and gas is supply and demand, when demand is greater than supply, the price of oil and gas will increase. The factors that affect supply include increased demand, problems with refineries and pipelines, and disruption to supply or threat of disruption to supply.
With the increased demand for oil in the United States and other countries such as India and China; the extra demand for oil has put enormous pressure on available oil reserves. The Energy Information Administration stated, “If refinery or pipeline and/or reductions in ...view middle of the document...
The most recent conflict that disrupted production is the attacks on the pipelines in Nigeria that caused Royal Dutch Shell to decrease exports due to damaged pipelines. Another recent conflict was the exports from Iraq being disrupted by Turkish and Kurdish forces. With these issues increasing the cost of oil and gas, consumers have to deal with the effects as well.
With oil and gas prices steadily increasing with no relief in sight, consumers have had to cope with the many adverse effects of high oil and gas prices. There are many adverse effects of increasing oil and gas prices that consumers have to cope with such as a change in lifestyle, change in shopping habits, and some drastic effects that include not paying utility or vehicle bills leaving some consumers with little options for getting to work. With the increasing oil and gas prices, consumers are left with less expendable income.
Consumers are changing their lifestyle, shopping habits, and driving habits. Consumers are left changing their lifestyle by staying home more; therefore, they are eating out at restaurants less, cutting back on entertainment such as nights out at the movies. Consumers are finding themselves combining trips for errands which include paying bills, medical trips, and grocery shopping. Consumers are also making the decision of not travel long distances for vacation or decided on not taking a vacation altogether. These effects have consumers looking for alternative ways of travel and more fuel economical vehicles. Mouawad, J., & Navarro, M. stated, “Americans have started trading their gas guzzlers for smaller cars, making fewer trips to the mall and, wherever possible, riding public transportation to work” (Mouawad & Navarro, 2008, para. 7). These effects have consumers making adjustments to how they shop.
With consumers being left with less disposable income they have changed their shopping habits by shopping online to save money on fuel by not...