Gas Price Hike: Expect $4 a Gallon—or Perhaps $6—By Spring

[imamomzilla]

 (time)

The national average for a gallon of regular is about $3.50 right now. That’s significantly below the highest ever (yet) price of $4.11, hit during the summer of 2008. Nonetheless, 2011 was the overall priciest year ever for gasoline, and the most expensive January ever for gas is the month that just passed by. Many experts anticipate prices will top $4 by springtime, and those seem to be the experts who are playing it safe with their estimates.

During the typical January, gas prices drop. Cold weather tends to keep drivers indoors, and the need to pay off holiday season splurges tends to keep consumers off the roads to trim fuel expenses. Together, these forces add up to a decline in both the demand and price for gas.

This year, the story is different. As the Los Angeles Times reports, the average price for a gallon of regular was $3.37 in January. Previously, the highest average price for January was $3.09, in 2011. Prices don’t seem to be leveling off, either: AAA’s Fuel Gauge says the national average on Monday stood at $3.480, up from $3.366 one month ago.

If events proceed as the consensus of experts expects, increases in seasonal and global demand will cause gas prices to creep up to $4 a gallon by summer or early spring. Here’s one analyst’s take, per USA Today:

“I think it’s going to be a chaotic spring, with huge price increases in some places,” says Tom Kloza of the Oil Price Information Service.

Kloza predicts a national average that peaks at $4.05, and he and others say that in New York City, Washington, California, Hawaii, and other spots where gas prices are typically much higher than the U.S. average, prices may top $4.50.

All of these forecasts, though, don’t factor in the possibility that the Middle East could make a chaotic spring even more chaotic. The Gas Buddy blog highlights some recent interviews with U.S. Defense Secretary Leon Panetta, in which Panetta discusses the likelihood of Israeli air attacks on Iran. If those attacks happen, it’s not crazy to anticipate the price of oil quickly doubling, surpassing $200 a barrel.

GasBuddy estimates how such a price hike would translate at the pump:

So if you’re seeing $3.50 a gallon in your local market and Israel attacked today, add $2.50 to that and now we’re looking at $6 gasoline.

If Israel instead took action in the spring, at which point gas prices are already expected to hover around $4 regardless of strife in the Middle East, then prices would go even higher:

If an attack occurs at that time and you add the same $2.50 increase that reflects crude oil at $200 per barrel, then — as incredible as it sounds– if Secretary of Defense Panetta’s intelligence report is correct, your gasoline would be $6.50 per gallon.

 

[toomanypoodles]

 I paid $3.75 this weekend. 

Wow, the manipulation. 

[rocketracer]

One day I paid $3.19.  The very next day I paid $3.49 at the very same place.  Why?

[matreshka]

Kinda off topic but related to the article above. If Israel attacks Iran on their own we should definitely unfriend them.  I don't want to see WW3 - nuclear edition happen.

[_Kissy_]

our legs work, and our bikes get a pretty good workout

[4kidz916]

I live in NC and we already have very high gas prices.  I'm not looking forward to this.  And sadly, I live in the country so it's about a 15-20 mile drive to get to schools, stores, etc.  Ugh!

[imamomzilla]

OUCH!  It jumped 20 cents overnight here too.

I have no idea why.

Quoting rocketracer:

One day I paid $3.19.  The very next day I paid $3.49 at the very same place.  Why?

 

[Mamawto4]

The US and Israel work closely together so there won't be any on their own, that the US doesn't know about.  In fact there was an article just the other day of how the US and Israel are in lockstep towards Iran. (I'll see if I can find it.)  But Israel has a right to defend itself as they see fit non-the-less.

The US and Israel have been friends for 100 years.  Why would you feel that we should unfriend Israel if they defend themselves against Iran?  Especially when the US is also considering taking action against Iran for nuclear weapons creation, which by the way would be to avoid WW3-nuclear edition.

Quoting matreshka:

Kinda off topic but related to the article above. If Israel attacks Iran on their own we should definitely unfriend them.  I don't want to see WW3 - nuclear edition happen.

[Mamawto4]

Yet when there was all the "drill here drill now" talk we were told that it would take 5 years to get things up and going.  Well it's been about 3 years now, and still we are facing the same problems.  Until we decide that we will be energy independent we will be vulnerable to all outside forces.

But I don't believe President Obama wants us to be energy independant.  I believe Obama would like to see gas prices soar.  Right now alternative energy is very expensive in relation to gasoline.  If gasoline prices soar, it would make alternative energy seem less expensive. 

[katzmeow726]

That's all fine and dandy if you have a city that is pedestrian friendly, and has reliable public transportation.

My DH works downtown, his job requires a car.  You can't walk downtown, it's impossible.  There are only a couple of busses that head that way, and more often than not they are late, or don't come at all.  A hike like that would seriously hurt us. 

Quoting _Kissy_:

our legs work, and our bikes get a pretty good workout

[4kidz916]

It will hurt me too since I live out in the country and it's impossible to walk everywhere. 

Quoting katzmeow726:

That's all fine and dandy if you have a city that is pedestrian friendly, and has reliable public transportation.

My DH works downtown, his job requires a car.  You can't walk downtown, it's impossible.  There are only a couple of busses that head that way, and more often than not they are late, or don't come at all.  A hike like that would seriously hurt us. 

Quoting _Kissy_:

our legs work, and our bikes get a pretty good workout