What The causes of the rise in food and fuel prices?

Answer 1

It all starts with oil, much of which (at least for the United States of America) comes from OPEC nations.

Crude oil is converted into gasoline. Oil is the primary source of automotive and airplane fuel, and home heating, just to name a few. Oil is also a big part of manufacturing plastics. All of these uses for oil limit the supply that can be used at any given time, which leads to the first cause:

Supply and Demand

As with almost everything, the price of goods is based on the demand of the public for said goods. In the case of oil, the more we drive our cars and trucks, fly in airplanes, the amount of time we spend each day with the heat on in our homes, and the amount of goods made from, or packaged with, plastic affects how much oil will cost. The more we use, the more it costs. The less we use, the cheaper it may be. It that old problem, when you want it, you have to pay more for it. When you don't want it, it's dirt cheap.

It's all about value.

Oil is more valuable during certain times. When summer rolls around, school is out for 2-3 months, families want to go on vacation, and that's going to require fuel. Local gas stations, OPEC, and/or oil companies raise their prices to get the most out of the consumer in this short time frame. More often than not, you'll notice a drop in gas prices shortly after classes resume for the new school year as demand for gas decreases.

There are times when the supply of gas/oil is reduced for reasons other than high consumption. An example of this would be during and after a natural disaster such as a hurricane.

The United States has many oil refineries in the Gulf Coast region, a region susceptible to hurricanes and tornadoes at any given year. These disasters do not just (economically) effect the states that are hit by them, but the country as a whole. Oil refineries can become damaged during an disaster event, equipment can be destroyed, and even the means to transport the gasoline around the country, including roadways, can be damaged or blocked in some way as to limit and/or slow the supply of gasoline.

The same can be said, though to a lesser extent, unless on a large scale, for man made disasters such as the oil spill in the Gulf of Mexico in 2010.

War

As has been mentioned, conflict and war in oil-producing nations can cause a dramatic change in the price of gasoline. Since these nations are the ones that provide the oil, when a conflict rages, it can, and will, affect the supply of oil, as not as much, if any, oil will be able to flow from that nation to the rest of the world until the conflict ends.

Oil Speculation

A lesser discussed, but still large part of the rise and fall of oil prices is the involvement of oil speculators. These are people who invest their money into oil through futures contracts. A futures contract is an agreement made by two parties on the trading floor of a futures exchange to by a commodity (like oil, gold, etc.) at a fixed price in the future.

Speculators, or investors, some say, have a vested interest in keeping supply low so that they make more money in the future from their investment. They play a part in restricting the amount of oil that flows into the market, limiting supply and increasing demand, thus making more money from high prices while the consumer pays far more than many can afford.

Answer 2

As the Natural Resources are getting over from time to time,the govts. of the countries are trying to save them more and more.............

as a result the non-renewable natural resources have a increase in their prices..........

Some of the blame can be put on the big oil companies - the same ones who were claiming "all time record profits" in mid 2008. "All time record profits" are not a result of natural resources being in short supply - It is, simply put, price gouging. Now that the US Government has started investigating these huge overcharges, the gasoline prices have dropped nearly $2 per gallon ... isn't that amazing!

Answer 3

Gas prices are rising because oil is being depleeted, its just running out

Answer 4

mainly because Egypt doesn't want to sell oil/fuel, then it becomes more expensive and that also effects food prices too with traveling and all that stuff