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Gas Prices To Soar Above $4 Per Gallon This Spring, Analysts Say

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Gas prices always soar in the springtime.

Northerners venture out of their houses more as milder weather arrives, and the market anticipates higher consumption for summer vacation trips.

This year, analysts say, prices could cross the psychologically significant $4-per-gallon mark, adding as much as 60 cents per gallon to the current national average.

There are several reasons, according to USA Today. The economy is improving, jobless rates are falling, and threats by Iran to close the Strait of Hormuz continue to make global oil markets nervous.

According to projections by GasBuddy.com, which tracks gas price trends state by state, the average national price per gallon will likely peak around Memorial Day at about $4.

That means that prices in the most expensive (which translates to most highly-taxed) of the 48 states could hit levels as high as $4.60 a gallon.

Want proof? Last May, gasoline spiked to an average price of $4 per gallon across all U.S. markets. (Then it fell below $3.50 early last autumn.)

Four dollars a gallon seems to be the psychological limit that causes people to change their behavior, either driving less or thinking harder about vehicles with higher gas mileage.

Gas pump with dollars

Gas pump with dollars

Enlarge Photo

If the current fragile economic recovery continues and strengthens, sooner or later, many households will have to replace their vehicles. The average car on U.S. roads is now more than 10 years old--the highest average age since World War II.

And with required corporate average fuel economy rising every year from now through 2016--and new standards reaching toward 54.5 mpg by 2025 out for public comment--new vehicles are likely to deliver notably lower fuel consumption.

The rising average fuel economy of cars on the road, as older cars are replaced with newer ones, is one of the reasons why--contrary to public belief--U.S. consumption of gasoline peaked in 2006.

It's been falling ever since.

But the cash you lay out for it? That's a different  story altogether.

+++++++++++

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Comments (6)
  1. When the automakers improve gas millage, the oil companies are going to increase price per gallon ...so what's the point of improving gas millage if it is still going to cost you $100.00 to fill up a 56.4 MPG car? We need to get the electric cars on the market as quick as possible.
     
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  2. The big pain will come with families and individuals who drive their old cars at 20mpg to their minimum wage jobs. Carpooling will be coming back strong with higher gas prices.
     
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  3. Government extended the jobless benefits (EUC/EB) and that goes through end of February. After that, 1 million people may fall off the unemployment insurance roster and as much as 5 million during 2012. I doubt that they will all be finding jobs during the "fragile recovery". If gas prices rise, it puts additional pressure on the lower and middle-classes. Econo-cars will be flying off the shelves (of both new and used car lots). May help the EV movement too. But we need $5/gallon (like Canada) before EVs really get traction in the USA.
     
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  4. High gasoline prices will lead to Nissan selling every Leaf it can make. Tesla should sell every one of its Model S sedans this coming summer provided it can ramp up enough production to satisfy demand. High gasoline prices will make EV so much more attractive since electricity cost about the same as $1 per gallon gasoline does
     
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  5. Leafs are so expensive that the people who are rich enough to buy them aren't really hurt by higher gas prices, so I don't think Leaf sales will go up much at all when gas prices do. The poor people who are hurt most by gas prices need new *gas* cars that are cheaper and more efficient, not more EV's that they can't even consider buying.

    Poor people don't tend to buy new cars; they buy cheap, used clunkers that save them more money over a new car up front, but have horrible gas mileage and polute like crazy. A $5,000 new car with 50mpg (that doesn't look like a washing machine on wheels) would be a godsend for them, our economy, and the environment.
     
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  6. The proposed 56 mpg converts to about 42 mpg on the car sticker so it's a small bump up from the new regulations kicking in the next few years..China's is still higher than ours.

    MrEnergyCzar
     
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