Gasoline prices jumped nearly 10 cents a gallon in the last week, and forecasters say that drivers could see even higher prices as summer approaches.
Gasoline prices typically rise in anticipation of the summer driving season. But in 2004, it was mid-May before prices topped the $2 mark. Last year, gas prices reached that milestone by mid-March. And this year, $2-a-gallon gas is but a distant reflection in the rearview mirror. It’s $3 a gallon we seem to be closing in on.
"Unfortunately, there doesn’t seem to be anything on the horizon that would cause us to think that prices would come down," says Geoff Sundstrom, a spokesman for AAA. "If we were suddenly to see an easing in international tensions and the price of oil was to retreat, that would be helpful. But nothing that we’re seeing in the news reports suggests that’s going to happen."
Instead, mounting concern about Iran helped push crude-oil prices up to nearly $69 a barrel Monday. That’s the highest crude prices have been since September and the days immediately following Hurricane Katrina.
Today’s high prices don’t stop at the oil well. Oil refineries are adding to the high cost. The refining process is complicated this year as more refineries start adding ethanol to the mix instead of the gasoline additive MTBE. With refinery capacity already stretched thin, there could be more upward pressure on prices.
"Potentially with some other disruptions in the summertime or higher demand just from driving, you could see prices breaking $3 again," says CEO Bruce Smith of the Tesoro refining company. "That’s not a prediction. It’s just looking at the probability there are a lot of things that could push it through to $3 (a gallon)."
San Diego college student Loren Gibbs doesn’t want to think about that. He’s already hurting after paying $2.87 a gallon to fill the Mazda Protege he shares with his girlfriend.
"Between us, we fill this thing up about once a week, and this is a little four-cylinder," Gibbs says. "The only thing the car gets used for is for us to get to school and for her to get to work. We don’t take driving trips anymore because gas is too expensive."
Consumers’ demand for gasoline actually did shrink a bit last fall when prices briefly topped $3 a gallon. But the conservation effort was short-lived.
"We’re not seeing an adjustment in the amount of gasoline consumed," says AAA’s Sundstrom. "I think where we are seeing a change in behavior is in consumer preference for the types of vehicles they’re buying. It seems as though consumers are clearly shifting away from larger SUVs and passenger cars to those that are more fuel-efficient."
Sundstrom says that, in the long-term, vehicle choices could have a big effect on demand for gas. He says consumers who are shopping for a new car should consider that during the life of the vehicle, gas prices could climb by another dollar a gallon or more.
Copyright 2022 NPR. To see more, visit https://www.npr.org.
