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This energy fact will not be a revelation to American motorists: The U.S. Energy Department now forecasts that gasoline prices will remain high -- around $4 per gallon -- this year and next, The Associated Press reported Wednesday.
The Energy Department's Guy Caruso, head of the department's Energy Information Administration wing, announced the revised forecast in testimony before a U.S. House of Representatives committee, The AP reported.
The EIA now expects the average U.S. gasoline price, currently over $4 per gallon, to peak at $4.15 per gallon in August. Regular-grade gasoline, which typically is 87 octane at U.S. gas stations, is expected to average $3.78 per gallon in 2008, or 97 cents above the 2007 average price.
Nevertheless, many high-cost U.S. cities -- including New York, Los Angeles, San Francisco and Boston -- are already experiencing gasoline prices in the $4.20-$4.60 per gallon range, with selected areas approaching $5 per gallon.
Moreover, the steady rise in gasoline prices is occurring despite the fact that weekly U.S. gasoline consumption has declined, on a year-over-year basis, for more than four months.
Energy traders and the EIA say higher oil prices, currently around $130-$135 per barrel, are propelling gasoline prices to record levels this summer, not refiners' charges: refiners' margins are lower than they were a year ago. What's driving oil prices higher? Increasing demand for oil from rapid-growth emerging market countries, led by China and India.
Gasoline Analysis: This summer's news at the gas pump represents a bitter pill for American motorists. They're cutting back consumption, driving less, and switching to fuel-efficient vehicles, among other changes, but they have little to show for it at the pump: so far the rise in the oil cost component of gasoline has offset reduced gasoline demand, which historically lowers the price of gasoline. Still, if motorists stay in conservation mode -- the major factor being buying fuel-efficient vehicles -- long-term this shift will help to moderate gasoline price increases. And absent public policy changes in Washington in the years ahead, or a sudden downturn in global oil demand, that's about the best one can hope for on the gas budget front.
What's your view of gasoline prices? Will the United States ever see $2 gasoline again? Or do you think gasoline prices are headed even higher? Let us know what you think.
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Reader Comments (Page 1 of 1)
6-12-2008 @ 6:08PM
william lindblad said...
Excellent question. The answer lies in supply and demand and what course U.S. industry and the public take. That's long term. In the immediate they are going to continue to rise until they break the bank It will be a repeat of the same greed and stupidity that brought on sub-prime. There is enough oil and there is no shortage The Chinese government is doing what it can to slow growth. India subsidizes - how long can the government hold out? None of the countries that use the subsidize system want to raise rates for fear of public unrest but they cannot absorb the steady climb in price. Iran has oil, and they already did this. Public reaction was negative. Korea is talking about this system. Look what is going on over there regarding U.S. Beef and you could expect twice as much when the fuel dole runs out. It is only a matter of time until the price kills the entire world economy - than there will be a glut and the price will fall.
6-13-2008 @ 9:03AM
Mary said...
Want the truth? Go to link and listen to the REAL reasons our Country is in the shape it is in.
Lindsey Williams, who has been an ordained Baptist minister for 28 years, went to Alaska in 1971 as a missionary. The Transalaska oil pipeline began its construction phase in 1974, he knows the rest of the story! Educate yourself and others....
http://video.google.com/videoplay?docid=3340274697167011147
Also go to youtube.com and serch John Perkin’s “The Confessions of an Economic Hit Man”. You won’t regret it!
6-13-2008 @ 8:34AM
asheekst said...
Isn't it ironic, thier rapid growth is due to our own outsourcing so now we are not only paying the price in loss of american jobs , now we can't afford to get to the jobs we have left.