$4 Gas Likely in 2008. Where Have You Heard That Before?

As the American economy continues to slow (the U.S. economy grew by 0.6% during the 4th quarter, the slowest growth in nearly five years) it looks like consumers are becoming fearful not only of a deep and prolonged recession, but of $4 gasoline as well.

According to a recent study by 40mpg.org, 71% of Americans believe that gasoline prices will hit $4 by this coming summer. If you get a chance, I would encourage you to download the entire survey/report from 40mpg’s website because there are a lot of interesting tidbits in the report aside from the aforementioned stat.

Regardless, this information isn’t news to Daily Fuel Economy Tip readers. As far back as May 2007, 49% of this site’s visitors were predicting $4 gas for the summer of 2008. And, oddly enough, back on December 4, I wrote a post regarding a recent survey I had conducted on this site in which 71% of respondents stated they believe gasoline will hit $4 during 2008.

It’s easy to see why the thought of $4 gas within the next four or five months isn’t that far fetched. According to GasBuddy.com, the national average price for a gallon of regular unleaded gasoline is currently $2.98 per gallon, while at this time last year, the national average gas price was $2.16 per gallon.

In one year the price of gasoline has jumped 37.9%.

Based on last summer’s record high gas price of $3.24 per gallon, it would take an increase of only 23.5% over last summer’s highs to reach the $4 barrier this summer. Considering where we are right now in terms of a year to year price jump, a 23.5% increase seems rather modest.

Fortunately, there may be a silver lining to the $4 gasoline cloud as there will likely be a stronger push towards more fuel efficient vehicles and more research and development efforts concentrated on developing reliable, clean and renewable alternative fuels.