How much does the petrol cost per gallon? The problem of wars and scarcity!

in GEMS2 months ago


You know, there is many duties on petrol and diesel, and it cost $1.39 per gallon to make the petrol. And a gallon is 3,785 litres. And this is extremely low in today markets, and it means that the war in Ukraine, the duties, the profit motive, the costs for making fuel, and the scarcity in different places in the world have consequences for how much we must pay for petrol and diesel, and in Norway these prices were at least 5 to 6 Norwegian kroner lower before the war, than what is the situation in the markets nowadays.

There are many regimes in the world trying to increase the profit of making and selling petrol, and these prices have increased much during the war between Russia and Ukraine, and this war is still going on, and if it escalate to different international places other than these places, it can have dramatic changes in the landscapes about what is happening. But it is stupid to start a nuclear war because Russia will when be deleted from the planet, so we should not hear too much about all the threats that are going on, and the intelligence level on the leaders should be measured in what they are saying and doing different places, and the United Nations and NATO are there to avoid big consequences for the war in Ukraine, and we should solve this war now, and finding the problems and the solutions on different things that are happening, and there should be enough negotiations to get there, and why Russia wants the situation back to the Soviet Union, that is strange and a mystery, because we are living and working now with the conditions and the people that we have different places on the globe.

So, in Norway, there has been an increase of nearly 100 % of the present and originally prices on petrol, and that is much. So, when we had Siv Jensen as the finance minister in Norway, the price on petrol was around 15 or 16 Norwegian kroner per litres. And this means that when sources are being attacked, and there is much more difficulties with getting the petrol to different places in the world where there is a need for it, the prices are going up due to the scarcity, and this is the most fundamental issue in Economics, and it implies that the more you have of something the lower is the price, and the less you have of something the higher is the price. And this lesson is true for all the products that we find on the planet, and in addition there is competition between shops and businesses, and this implies lower prices with more competition, and higher prices with lower competition.

So, the crude petrol and the crude diesel are low in prices than what we find in the markets different places today, and this means that the prices must have explanations about what is really the situation nowadays, where people and firms need the petrol or the diesel to run their household and businesses further in the present and in the future, and the more and the higher the prices are, the more support we need from public authorities. And therefore, there are many different addition to add up the prices and state what they consist of. And the higher the prices are, the more trouble and the more problems it implies for households and firms, and the core in Economics is that the price for petrol and diesel is higher the more scarcity and lower the less the scarcity is.

So, the behavior and all the actions that are happening at home and worldwide have some logical reasons or either they are stupid and irrational. And we can do business and fight for the quantity sold and the prices that we are getting in the markets, and we need economists to explain what is happening, and sometimes there is either especially low or high prices due to the specific days and the periods that we are experiencing, and this can be surprises, or we can find logical reasons in the markets. But you know, the most fundamental issues we are facing in Economics, are the alternatives to be done when doing something, and the scarcity of resources, since there is no slaffer country in the world, and therefore we must explain the prices with variables, factors and parameters, and that is the situation everywhere. If we had slaffer country in the world, we did not need the economists, and these are needed at once when we should calculate where and how the resources should be as they are. And the resources are the capital, the labor and the landscapes.

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Sverre Larsen

Kristiansand, Norway


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Thank you very much for this graph, I notice that prices in 2008 were even higher than now

Thanks! 👍😊