What can Chevron do about the increasing gas prices? Is a decrease in price per gallon possible?.
How can Chevron adapt to the global climate change?.
3. How can Chevron decrease accidents? Increase the safety of their employees and the public at large?.
Strategic Analysis .
Economic Forces.
The gasoline market is a highly competitive market. Gasoline prices have risen in response to market conditions and the market will correct any imbalances in supply and demand. Prices are the mechanism that allows market forces to work. Market conditions have resulted in sharp price increases in some areas, and the market will operate to moderate those increases as additional supplies reach customers.
Rising gasoline prices are the result of market forces operating in a rapidly changing environment. They are a reflection of increased costs and tightness in supply, particularly in the Midwest. .
Rising pump prices reflect higher worldwide crude prices, which now exceed $30 per barrel, approximately 300% higher than the prices if a year-and-a-half ago. Crude oil costs are the single largest components of gasoline costs and petroleum refiners, marketer and retailers have had to pass those increased costs along to stay in business.
U.S. refiners are running at record levels and are producing large amounts of gasoline, equal or greater than in most recent years, but U.S. motorist are also driving more to meet the demands of their busy lives. High demand puts upward pressure on prices.
New and varied gasoline specifications also affect prices. The United States has become a nation of "boutique" fuels (ex. Techron) and the result is that refiners and distributors no longer have the flexibility they need to move supplies around the nation to respond to local or regional shortages.
In the Midwest the majority of reformulated oil is blended with ethanol because of its availability in the region. RFG blended with ethanol is more difficult to produce because the hydrocarbon portion must have lower evaporative properties to accommodate ethanol's higher evaporative qualities.
