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You'll Pay $700 More For Gasoline This Year (If You're Average)

 
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According to the Department of Energy, the average U.S. household will pay $700 more for gasoline this year than it did in 2010.

In a weekly review of the oil market, the department's Energy Information Administration noted that prices will rise at least 10 cents more over the current national average of $3.50 a gallon, due to the lag in wholesale price rises reaching the pump.

It also projected that peak gas prices, which historically occur over the summer, will reach $3.71 a gallon. That's a full dollar higher than the average price at the same time last year.

And the DoE says the chance that gas prices will soar above $4 a gallon this year is higher (25 percent) than the likelihood they'll fall below $3 (10 percent).

2011 Toyota Prius

2011 Toyota Prius

Enlarge Photo

The current price rise is driven by uncertainty over the impact of political unrest in several oil-producing countries, most notably Libya.

Consumer interest in fuel-efficient cars, smaller models, and hybrids and clean diesels has risen, and more 40-mpg-rated cars are available in the U.S. market now than ever before.

(With a combined EPA rating of 50 mpg, the 2011 Toyota Prius hybrid remains the most fuel-efficient car sold in the U.S. today that doesn't plug in.)

But some analysts suggest that buyers not pay too much attention to gasoline prices.

The argument goes like this: You can't predict what will happen to oil prices, and buyers run the risk of overreacting and getting a smaller or a different kind of car than the one you really want.

But what do you think? Will the present rise in the cost of gas lead you to buy a different car than the one you might otherwise have gotten?

Tell us what you think in the Comments below.

[Reuters]

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Comments (6)
  1. In fact if the gasoline price rise of 2008 is any guide, it might be a good time to buy that SUV. When gasoline prices hit $4/gallon, people were dumping SUVs like they were on fire. The prices crashed and it was a great time to buy one. Perhaps a year later, gasoline prices had crashed back to $1.60/gallon and you could afford to drive your SUV (only on weekends please.
    On the other hand, fuel efficient cars can be a great economic hedge against rising gasoline prices.
     
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  2. Peaking at $3.71/gal?!?!?!?! Who are you kidding? Prices in central NY are already at $3.80/gal and it isn't spring yet...
     
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  3. I know this has been said many times before but the price rise is fast than the price lowers. And that is related to wholesale prices.
    Can you say cartel?
     
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  4. I think it's the right time to buy a camel or horse.
     
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  5. Well, in my house, we will probably be impacted more. We heat with gasoline, er. diesel, er. home heating oil. Whatever it is, it goes up with the price of oil.
     
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  6. We have been cutting back on our miles driven. Conservation is a hell of a lot cheaper than buying a new hybrid or EV.
     
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