Critique on Melissa Zeina- The Supply and Demand of Gas

Steven Christopher
Critique on Melissa Zeina- The Supply and Demand of Gas
Melissa’s article post of supply and demand of Gas is current and very interesting. She starts off by stating the gas prices have been at an all time high because of a simple problem of supply and demand because of recent disasters is Japan and in the Middle East. Melissa gives evidence by stating that gas prices have raised eighty cents sense last year. This is because the oil companies in the Middle East are having a very hard time providing the supply for the demand. “The main issue focused on here is the inequality of supply and demand. Supply is not changing, but the demand is on the rise.” (Melissa). Because the demand is rising, so much the supply, and the equilibrium price is changing. Statistically, if demand increases than so must the price of gasoline.
The problem with this is that the demand of gasoline will never diminish as long as it is the main fuel provider for the world. Since gas is a natural resource, there will always be a high demand for it until it finally runs out. But, this is not the only thing that is changing the demand of the gasoline, the majority of it is happening because of the international problems that were caused in Japan and the Middle East. “The Japanese economy is going to need its electric power from oil-based sources as a backup to their nuclear problems”. (Melissa). This means that Japan is going to be purchasing a vast majority of the oil supplies. Although there is a serious shortage of gasoline, the demand curve and price will continue to shift. Consumers will continue to purchase the gasoline no matter what the equilibrium price is set at.
Another relevant point that Melissa makes is that the demand isn’t just being caused from the disasters, but from increase of industrialization and production. As stated, “The two of the main countries that are increasing the demand of oil are India and China.” (Melissa). If predicts to increase their oil consumption by 6.5 percent this year alone than the demand and price of oil will increase. I agree that one of the main reasons that oil prices are going up is because of the large amounts of oil that the strongest world powers are using.
Finally, I agree with the statements that Melissa makes about consumption increasing as price does. Some countries do not have an alternative resource of power. Even though the definition of price elasticity states that if a price commodity rises, then demand will fall, it is not like that. The supply is what is determining the price of the gasoline, and the supply is remaining the same because they can only drill so much out of the ground. Demand is going to continue to increase. I disagree with Melissa’s statement that the large increase of price in the summer will lessen the demand for gasoline, at least in the United States. We have very poor public transportation such as electric powered trains. Americans rely on their cars to get them everywhere, and you need gas to do that. Gasoline will always have a high demand, high price, and small supply.