Gasoline Prices Up 40% This Summer, U.S. Says

April 22nd, 2011

Market Watch

By: Ruth Mantell

Retail prices for a gallon of regular-grade gasoline will average $3.86 from April through September, up from $2.76 for the comparable period last year, said the Energy Information Administration, the statistics arm of the Department of Energy.

In some areas, monthly average prices could top the national average by at least 25 cents a gallon.

“The continuing economic recovery tends to boost gasoline and diesel fuel consumption, while the effect of higher retail prices tends to dampen it,” according to EIA. “These counterbalancing forces are expected to be prominent features of the summer driving season.”

According to AAA’s daily fuel-gauge report, the national average price for a gallon of regular gasoline is about $3.79, up about 33% from $2.86 a year earlier.

The average U.S. household’s vehicle fueling costs will rise about $825 from last year’s level, hitting $3,360 in 2011, the EIA said.

The government also expects refiner acquisition costs of crude oil to average $112.50 a barrel this summer, up about 50% from the prior year.

Meanwhile, wholesale gasoline margins — the difference between the wholesale price of gas and the refiner acquisition cost of crude — are forecast to average 53 cents a gallon this summer, up 47% from last year.

The catalyst for the increase, according to EIA, will be “continuing strength in worldwide liquid fuels consumption.”

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$7-a-Gallon Gas?

June 18, 2010

New York Post

By Ben Lieberman

President Obama has a solution to the Gulf oil spill: $7-a-gallon gas.

That’s a Harvard University study’s estimate of the per-gallon price of the president’s global-warming agenda. And Obama made clear this week that this agenda is a part of his plan for addressing the Gulf mess.

So what does global-warming legislation have to do with the oil spill?

Good question, because such measures wouldn’t do a thing to clean up the oil or fix the problems that led to the leak.

The answer can be found in Obama Chief of Staff Rahm Emanuel’s now-famous words, “You never want a serious crisis to go to waste — and what I mean by that is it’s an opportunity to do things that you think you could not do before.”

That sure was true of global-warming policy, and especially the cap-and-trade bill. Many observers thought the measure, introduced last year in the House by Reps. Henry Waxman (D-Calif.) and Edward Markey (D-Mass.), was dead: The American people didn’t seem to think that the so-called global-warming crisis justified a price-hiking, job-killing, economy-crushing redesign of our energy supply amid a fragile recovery. Passing another major piece of legislation, one every bit as unpopular as ObamaCare, appeared unlikely in an election year.

So Obama and congressional proponents of cap-and-trade spent several months rebranding it — downplaying the global-warming rationale and claiming that it was really a jobs bill (the so-called green jobs were supposed to spring from the new clean-energy economy) and an energy-independence bill (that will somehow stick it to OPEC).

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Gas Prices Rising; May Hit $4 Gallon

April 9, 2010

CBS

By: Derrick Blakley

Don’t look now, but a gradual rise in gasoline prices has suddenly turned into a gallop, with drivers facing a new round of sticker shock.

But as CBS 2′s Derrick Blakley reports, the higher prices might actually be a good thing.

The growing pain at the pump kind of snuck up on many Chicago drivers, but now they’re really feeling the bite.

“I just paid $3.54 for gas,” said Michelle as she filled up at a Chicago gas station. “It’s just outrageous.”

Just a month ago, according to AAA Chicago, unleaded regular averaged $2.86 a gallon in the Chicago area.

Last week, it was $3.02.

Now, it’s $3.08 and many predict it’s heading higher; much higher.

Daniel Flynn, energy trader at PFG Best Research, was asked just how high the gas prices might go.

“That’s the good question,” said Flynn. “I’ve heard as high as $4 a gallon. Some analysts are saying $4.”

What’s going on? Reports that the economy is heating up – with growing consumer spending, higher retail sales and higher auto sales – has speculators betting on higher energy prices, too.

When the economy grows, so does demand for oil. But pushing energy prices too high could backfire.

“The last thing we want to see is higher energy prices at this time,” said Flynn, because it can impact the rest of the economy negatively.

“I’m not happy with it,” grumbled motorist Don Davis as he filled up. “I think it’s gonna kill our recovery.”

Davis fears a repeat of July 2008, when oil prices hit a record.

“It was $140 a barrel for oil and gas was $4 a gallon. I feel it’s happening again. And it’s not good news for the average person, that’s for sure.”

Bad news because money that’s spent on higher energy costs is money diverted from other parts of the economy.

“Anytime you’re spending more money on gas, it’s gonna dip into your pockets a little,” noted Brad, another driver topping off his tank.

Plenty of analysts believe with unemployment still over 10 percent, the economy’s just too weak to sustain gas prices of $4 a gallon.

The consensus seems to be that prices will keep rising for awhile, until reality sets in, with prices coming back to earth, at least by July 4.

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