I woke up this morning and the price of gasoline in Toronto was around $1.14 a liter which, for you American readers, works out to about $4.32/gallon. The current price for oil was $110 per barrel. These are very high prices and truth be told, don’t expect them to drop much.

Despite the high prices, people still want their big cars and big SUVs. They will still drive everywhere, even if it is only a few blocks. Consumers, in general just don’t seem to get the message. However, I do not really believe that consumer driving and gasoline consumption really makes that much difference. There are other, larger factors at play.

Manufacturing uses the vast majority of oil resources and there is little to no pressure placed on them to look for alternatives. With developing nations like China and India, which have no concern about natural resources or pollution, consuming literally shiploads daily, the problem is not going to go away.

Corporate and government greed is another huge influencer on oil prices. Oil companies are making record profits at the expense of your pocketbook. Government is ok with driving (literally and figuratively) it’s citizens to the poor house. Why? Politicians need money to be politicians and oil companies “donate” (kickback) billions to ensure things stay just the way they are.

Resource shortage may be the biggest reason why gas prices are, and will remain, high. Periodicly you will hear how OPEC will not be increasing oil production. What people don’t know is that they CAN’T increase production. OPEC is already at capacity. These announcements are just smoke and mirrors to hide the ugly truth. Another ugly truth is that Saudi Arabia, that mystical source of never ending oil supplies is, well, running out of oil. It is a desert above ground and now below ground as well. At the end of the day, gasoline prices are driven mainly by the laws of supply and demand…the demand is high and there is no supply anymore.