Business & Tech
How High Will Gas Prices Soar This Spring?
Prices at the pump have already jumped 45 cents a gallon since Jan. 1, 2012.
It's almost springtime and gas prices are, once again, creeping close to the $4-a-gallon mark, with some forecasters suggesting that prices could top $5 a gallon in the not-too-distant future.
Prices at the pump have already jumped 45 cents a gallon since Jan. 1, 2012.
At this time last year, this writer regularly drove around Chevy Chase and parts of Bethesda looking for the least expensive places to fill up the mini-van. Almost always, the excursions ended at the on River Road in Bethesda.
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This gas-consuming exercise is no longer necessary thanks to Patch's handy gas price search widget.
But the same questions persist: What's behind the recent flurry of price hikes—Iran and rising tensions in the Persian Gulf? Speculation by commodity traders? Or, is it just seasonal supply-demand factors?
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One thing is clear: Rising prices are not to be blamed on your neighborhood filling station.
As Mario Bruno at the gas station in the Chevy Chase Lake neighborhood likes to explain, the dealer is simply passing along the higher fuel costs to the customers.
The typical driver in a suburban area is estimated to pump about 60 gallons each month. That means every 50-cent increase in prices translates into an extra $30 per month, The New York Times reported last week.
"You're going to see a lot more staycations this year," Michael Lynch, president of Strategic Energy Research and Capital, LLC, told the Associated Press late last month. "When the price gets anywhere near $4, you really see people react."
Higher gas prices also have an an economic impact, curtailing consumer spending and economic growth. It's estimated that every 25-cent jump in gas prices costs the U.S. economy $35 billion, USA Today reported last month.
While that figure represents only 0.2 percent of the Gross Domestic Product, it's still a meaningful figure, USA Today added.
The most worrying aspect of the recent surge may well be the fact that it sets the stage for possibly bigger price jumps later this month and in April, when the refineries suspend operations in order to switch the types of gasoline they make.
That could be the tipping point toward $5-a-gallon gas, but time will tell.
