Over the past two years, it has been said that gas prices would begin to rise in 1999. Immediately, this news grasped the attention of the business sector and public. Both spent their time devising a plan, on how to keep the prices low, but the time has come for these plans to begin working. The fuel prices have increased dramatically and the economy is now starting to feel the effect.

Around the world, the increase of the price of crude oil has hit the public harmfully. May Canadian's heat their homes with oil, especially on the west coast, and the cost of oil has increased 50% or more with a three-month range. In America, president Clinton has begun spending countless millions of dollars, to aid the families, which who cannot afford to pay for those absurd oil prices. This cause crises causes problems to the families that need every cent they earn to continue on their daily living. The standard of living, per household drops and consumer spending decreases, in order to save enough money to pay for oil. If this continues on, it will very well cause the economy to fall into a contraction period.

In Canada the cost of fuel has hit record highs of $.69 a liter to $.71 to lite

It's a proven fact that OPEC (Organization of Petroleum Exporting Countries) is responsible for the insane prices of gas. The Organization was able to increase the prices of crude oil by limiting the amount of barrels of oil to 4.3 million per day; OPEC used the cartel technique in order to increase the price of gas.

The gas prices effect on employment is that the prices for gas are too high for people to continue on their work, and consequently people will stop working, or businesses will layoff workers in order to still gain a profit. With relation to the CPI, the price for gas increase, but the demand still stays the same, therefore if a trucking company charges low shipping costs, to still gain a profit their charges will hike up, in order to still gain a profit. Consumer confidence reduces because the public doesn't have enough money to pay for the high prices, but the demand still stays the same. The government seems to solve the problem of gas prices, but it's not quite working, or it's taking too long. It seems Canada's being reluctant to spend money in order to help the Canadian public, and actually the government is contributing to the problem, gas prices at the pump are taxed 30%. If Canada reduces the tax, highly unlikely, it would reduce the price a bit. Down the road, gas prices

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Approximate Word count = 879
Approximate Pages = 4 (250 words per page double spaced)