Summer gas prices on the rise

[MNdudeswitz]

Summer gas prices on the rise

Average cost for a gallon of regular will be 25 cents higher than last year, U.S. says; strong driving season expected.

By Steve Hargreaves, CNNMoney.com staff writer
April 11, 2006: 10:40 AM EDT


NEW YORK (CNNMoney.com) - Americans taking to the road now that the weather's getting warmer can expect to pay about 25 cents more for a gallon of gasoline this summer, the government said Tuesday.
And that may be a conservative estimate.

"We're already 40 cents higher per gallon that we were last year," said Geoff Sundstrom, a spokesman for AAA. "We think the department of energy may be underestimating what the impact will be at the gas pump."
Nevertheless, despite the expected price hikes, not many people are likely to stay home, according to the Energy Department. It predicted that drivers will use more gasoline this summer than last.
The department, in its seasonal forecast, said the average price of a gallon of regular gasoline will jump to $2.62 over the summer, up from last summer's average of $2.37 a gallon.
The department's Energy Information Administration said prices for the whole of 2006 are expected to average $2.50 a gallon for unleaded regular, and $2.40 a gallon for regular in 2007 - and many experts say that prices will top $3 a gallon, especially in larger cities.
Diesel isn't expected to get a break either, with prices averaging $2.62 a gallon this summer. And some regions could be harder hit. AAA's Sundstrom, for example, said gasoline could easily exceed $3 this summer in some high price areas like California.
The Energy Department agency blamed rising prices on three things -- soaring oil prices, the added costs of producing lower-sulfur gasoline and phasing out older additives, as well as rising demand from American drivers.
But the report also said that by September 2006 prices should ease off and drop back from 2005 levels, after pump prices soared last fall after the devastating hurricanes along the Gulf Coast, home to much of the nation's oil drilling and gasoline refining.
There's another warning, though: that hurricanes this year could lead to further price spikes.
The summer forecast comes amid already-soaring gas prices.
The average price for a gallon of regular rose another cent Tuesday to $2.686, according to a AAA survey.
Gas prices have gained nearly 33 cents, or almost 14 percent, in the last month.
Lower-sulfur gasoline is mandated under federal law to reduce greenhouse gas emissions, while the leading additive, known as MTBE, has been found to contaminate groundwater and is being phased out in favor of corn-based ethanol.
The agency said price hikes from the change to new lower-sulfur gasoline is coming due to possible spot shortages.
Production of the reformulated gas is only expected to add 2 cents a gallon while it will reduce sulfur emissions by up to 90 percent and nitrogen emissions by up to 95 percent.
The phase out of MTBE meanwhile is expected to be more disruptive as ethanol, a newer additive that's replacing MTBE, would be in short supply.
________________
http://money.cnn.com/2006/04/11/mark...ex.htm?cnn=yes

[coaster.n3rd]

Really? gas prices are on the rise this summer?

This seems like some lame story you would see on the 5 o'clock local news...

[importedtuna]

Wait for the Suburban / Silverado drivers to come along and tell us that "3.00 a gallon ain't sp bad."

[VibenPontiac]

No way...I also heard the sun will set tonight...what a news story.

Gas goes up EVERY summer!

[MNdudeswitz]

but the fact that its almost 20 cents higher than last summer..........not good!

[VibenPontiac]

Considering gas last Spring was 20 cents cheaper than it is now, while not good, not at all surprising, and not very news worthy. These are the kind of stories the media come out with for the sake of telling us something bad - i.e. no real benefit to the listener, reader, or viewer, just talking points among people like us visiting forums

[importedtuna]

Originally Posted by VibenPontiac

No way...I also heard the sun will set tonight...what a news story.

Gas goes up EVERY summer!

Yeah, it doesn't go up 40 cents each summer and never come down. Come back to reality, please. In 1999 I could buy a gallon for 89 CENTS. Yes, that was a big plunge, but now we are seeing the opposite with no drop back down. Stop lying down and just taking it for whatever reason, your family works in the oil business, you love big trucks, or you think high gas prices are a negative for GM. Just stop. No reason to ignore the fact that prices are going up and staying up at a rate that does not make sense from a historical perspective. At this rate we'll be paying 4 dollars a gallon in 2-3 years, if not sooner.

I don't know about you guys, but I plan to vote with my wallet against this nonsense, whether it be through E-85 or an efficient 4-banger. When it doesn't cost me 5 bucks just to drive back and forth from work I'll consider getting a big musclecar or truck again.

[kenman923]

A repeat of last year. Just what we need.

[MNdudeswitz]

They are saying it will be 3.00 a gallon this summer; and we will probably never be in the 2.00 range ever again!

[MNdudeswitz]

It also doesn't help that the Aura gets terrible gas milage

[TaHoE]

Why? What happened now? Did some fat chick in Persia sneeze? God. Big deal, demand is going up...push production up....$2.50 is high enough. I wish I had a smaller car...

[BurnieMET13]

Eh... 3 dollars a gallon isn't soo bad...

-Me, GMC Sierra driver


Couldn't resist.

[Steel4ring]

Originally Posted by BurnieMET13

Eh... 3 dollars a gallon isn't soo bad...

-Me, GMC Sierra driver


Couldn't resist.

Me too. $3.00 is cheap relative to the rest of the world. Although it would be nice if it were cheaper.

A Suburban & Aztek driver.

[VibenPontiac]

Originally Posted by importedtuna

Yeah, it doesn't go up 40 cents each summer and never come down. Come back to reality, please. In 1999 I could buy a gallon for 89 CENTS. Yes, that was a big plunge, but now we are seeing the opposite with no drop back down. Stop lying down and just taking it for whatever reason, your family works in the oil business, you love big trucks, or you think high gas prices are a negative for GM. Just stop. No reason to ignore the fact that prices are going up and staying up at a rate that does not make sense from a historical perspective. At this rate we'll be paying 4 dollars a gallon in 2-3 years, if not sooner.

I don't know about you guys, but I plan to vote with my wallet against this nonsense, whether it be through E-85 or an efficient 4-banger. When it doesn't cost me 5 bucks just to drive back and forth from work I'll consider getting a big musclecar or truck again.

No I don't have any relatives in the oil business, I don't drive a big truck or SUV, and I don't think high gas prices are necessarily negative for GM, I'm just a little educated on how commodity pricing works, and I'm not easily susceptible to conspiracy theories. Oil is a commodity and commodity pricing is highly dependent on risk, especially when most of it comes from a unstable region. There is simply no proof that we're getting screwed. The huge profits of Exxon last year is easily accounted for by the simple fact the world is consuming ever increasing amounts of oil and disruptions (real and potential) have had a huge impact over the last several years. If you want to blame someone, blame the commodity traders (granted it is feasible that some traders working for the oil companies).

Oil is a finite resource and when China, India, and other quickly developing economies begin consuming oil at the rates they have over the past several years then prices are effected by the basic laws of supply and demand. Localized supply and demand also comes into play - as a country we drive way more than any other country in the world and basic economics tells us that prices will increase faster in the U.S. than in other countries because we are willing to pay $3 a gallon when someone in say China will not.

I have yet to see a real reason why prices should come down - we still consume more gasoline year after year, things in the Middle East, Nigeria, and Venezuela aren't getting any less nutty, China and India are still growing like weeds. Until we as a society take the attitude you exhibited in your last paragraph we have only ourselves to blame.

And on that note, we're not in total disagreement...I agree with your last point - I have already done that - I already drive a 4-banger and have moved closer to where I work to reduce gas consumption.

[drew630]

Originally Posted by Steel4ring

Me too. $3.00 is cheap relative to the rest of the world. Although it would be nice if it were cheaper.

A Suburban & Aztek driver.

I third that. And yes, this college student pays for his own gas.

Silverado Z71