Nearly a month after declaring that we should expect to see slightly lower gas prices this summer, the head of Department of Energy has backed off that assertion and now believes that we might break our record high average gasoline price.
According to an article published by Boston.com, Energy Chief Samuel Bodman believes that a slight run up in the price of oil, coupled with problems at several refineries may be more than enough to cause the national average gas price to shoot past the record high average gas price of $3.07 – which was set in 2005 shortly after Hurricane Katrina.
In the article, Bodman stated:
“We have had a number of refinery outages; we have had a run-up in oil prices. The combination of those two has led to concerns on my part. Not so much that we’ll have shortages. I do not think so. But I worry about price.”
Obviously, it’s disappointing to see that it’s pretty much become a foregone conclusion that we’re going to pay more for gas this summer than we did last summer, but at the same time it is kind of nice to see the government come out and stop teasing people with the idea that gasoline prices might drop.
While Bodman didn’t say how high he believes gas prices may get, several analysts are already predicting prices north of $4 per gallon.
Although this scenario may be unlikely, it certainly isn’t out of the realm of possibility, so hopefully you’ve set aside some extra money in your budget to account for the possibility of record high gas prices.
{ 2 trackbacks }
{ 2 comments… read them below or add one }
I got so fed up with these prices that I create a daily 3 day gas cast and post it at:
http://www.bullseyepredictions.com
This 3 day “gas cast” tells you the day that gas will be the cheapest so you can time your purchase accordingly. Every little smart way of doing biz, if we all do it helps to send a message and saves some money. And nope, no ads, no popups, its all totally free – just make a note of the best day to buy gas and be on your way..
The math is a little esoteric but – I decided to play them at their own game – there IS a relationship between gas prices in the futures (cash) market and the price at the pump. Its exactly what the oil companies do all the way up the chain, they divert tankers to the atlantic or the pacific coast, slow them down – choose the make up of the refinery output – all based on projected demand to maximize profit.
My predictions service creates a level playing field so we consumers can also take advantage of the demand information.
-K
Frankly, since the car is the most expensive part of driving, I really don’t care what gas prices do.
Would I like to spend $1/gallon instead of $3/gallon? Sure.
However, when you are spending $20K + for most new cars, the price of gas, even at $3+/gallon is such a small cost of ownership that it’s not really worth complaining about.
Want to save money? Buy a $2500 beater and drive it for 4 years and 100K miles like I did.
Total cost of ownership over the last 100K mile, including vehicle purchase: $12,800 or $0.128/mile. That includes purchase, maintenance, repair, insurance, tax, tags, title and of course, fuel.
Any $20K car purchased and drive for 100K miles with no repairs or maintenance is already $0.20/mile before you buy a drop of fuel.
So stop complaining about the price of gas and address the issue where you can do the most good, by making a more cost effective vehicle choice.