econ assignment
Tekst Storyboardowy
- OMG why is gas so expensive these days??? I blame Trudeau and his Carbon Tax!
- Actually, the Carbon Tax only accounts for a small portion of gas prices, about 11¢ /litre.
- But HOW?? I dont get it!
- No way! What made the prices go up so much then?
- Gas prices are determined my supply and demand, and in recent months, these market forces have caused gas prices to skyrocket
- As COVID restrictions ease up, more people are traveling and going to work every day, using more gas.
- This has caused the demand for gas to go up, meaning consumers as a whole are willing to buy more gas for the same price, or the same amount as before for a higher price.
- Ohh I kinda get it. But why don't producers just supply more gas to bring down the price? Prices were never this high before Covid.
- Great question! There are 3 main reasons why the supply for oil is still so low.
- Firstly, a group of countries called the OPEC, who control 82% of the world's oil reserves are refusing to increase production, since they are a cartel which can collude to control prices, and benefit from high oil prices.
- Secondly, the USA, which is the world's largest oil producer is being very slow to ramp up oil production, since fracking more oil from their shale wells takes time and money to acquire the manpower and equipment required to increase plant size.
- And to make this all worse, there have been widespread sanctions and embargos on oil from Russia, the world's third largest producer oil after their invasion of Ukraine.
- Woooowww that's so unlucky!  I guess I'll bike to work from now on..
- Great decision! Makes it cheaper for the rest of us!
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