The Price of Gasoline: What’s Behind It?

Have you ever noticed how much it costs to fill a car with gas? The price of a gallon of gas changes every day. In fact, two gas stations less than a mile apart might charge different prices. Why? In the last few years the price of gas has risen. Why? In order to answer the questions raised by this lesson, you will work as a detective. You will investigate where a lot of the money that people spend on gas goes. You will determine whether or not it is appropriate to blame the nations that produce the oil that is used to make gas for the high cost of gas.

The President of the United States is not happy that gas prices are so high. He has asked you, a detective working for the United States Department of Energy, to determine if he should put the blame on the nations that produce much of the oil used to make gasoline. In this lesson, you will develop the necessary information to answer this question intelligently. You will identify those nations that produce the most oil in the world. You will also investigate where the money goes when consumers pay for gas. You will consider a variety of reasons that gasoline prices might be high. Finally, based on the knowledge gained from the activities in this lesson, you will determine if the President of the United States should blame high gas prices on the nations that produce the most oil.

The President of the United States needs your help. He has asked you to investigate and find answers to several important questions. The letter and questions are included in the Letter From the President worksheet that you can print, read and fill out. Fortunately, your assistant has already identified several Web sites that might help you in the research required to answer these questions. Your assistant has written you this memo identifying sources where you can find information to answer each question.

In this lesson you have learned that when somebody buys gasoline at the gas station the money goes to several different places. In fact, whenever anybody buys anything at a store the money typically goes to a number of different places. Any one of these places can influence the cost of the good being sold. In this lesson, you have considered whether or not it is fair for the President to blame the high price of gasoline on nations that belong to the OPEC Cartel.

Now that you have done all the research it is time to let the President know what you think. Use the Letter to The President worksheet to write a letter to the President of the United States explaining whether or not you believe that the President should blame the high price of gasoline on OPEC nations. The President also wants a justification for your opinion. Therefore, please be sure to explain yourself. You can do this referencing what you have learned about the factors that influence the price of gasoline at the pump.

1. In this lesson, you have identified the names of the nations that belong to the OPEC cartel. Now see if you can identify their correct locations on a map in this Mapping OPEC Activity.
2. In this lesson, you have considered the price of gas for cars. Certainly the price of gas has risen throughout recent history. Has the importance of cars also risen recently? Have cars also become increasingly important in recent history? In this activity, you will interview an older American about the ways that they used cars when they were young. You will also answer these questions yourself. When you have completed this work, compare the answers. Determine whether cars are more important today than they were fifty years ago. Answer the questions on the Cars: Then and Now worksheet.