Gas prices expected to continue to rise with high cost of crude oil, experts say
Coming to a gas station near you – $4 a gallon?
Some analysts say prices are headed in that direction, though no one is ready to predict just how high they might go.
In the state of Washington, the average price for regular gasoline is currently hovering around the $3.20 per gallon, according to AAA. Clark County’s average is a few cents lower than that, but prices continue to rise.
In years past, the end of the busy holiday travel season would signal relief at the pump. However, experts say that’s not the case anymore, because the price of gas isn’t tied to demand like it used
to be.
“Prior to 2001, gas prices really followed supply and demand. Now, they’re much more based on speculation in the crude oil market. So just because demand is low does not mean prices will go down,” explained Jennifer Mills, AAA representative for the state of Washington.
As of Monday, the cost of crude oil was approaching $90 a barrel – the highest it has been since 2008, the same year the nation saw average gas prices hit a record high of $4.11 a gallon.
“If you affect the cost of transportation, it’s huge,” said Darlene Johnson, president of Woodland Truck Line Inc. “It hurts truckers because we have to add a fuel surcharge to the bill, and that makes them less competitive. If they’re not as competitive, they suffer in business and we haul less. It hurts the manufacturer, the farmer, and the guy that buys the tomato in the supermarket because the truck brought it. It’s a vicious cycle.”
According to Mills, prices are expected to soften slightly before the end of winter, though any relief may be short-lived.
If one thing is certain, it’s that gas prices in 2011 will be difficult to predict.
“Sometimes the spring run-up in prices starts in mid January, and sometimes it doesn’t start until March,” said Mills. “Sometimes the increase is between 10-20 cents, and other times it’s between 40-50 cents. There’s just not a typical year to base it off of. In fact, since 9/11 there hasn’t been a typical year. Not one year looks the same.”
