With production levels off from this time last year, there's roughly 6 percent less gasoline in stock. At the same time, peak driving season is almost here. Low supply, high demand it doesn't take a Ph.D. in economics to figure out what that could mean.
"I would not be surprised at all to see gas at $2.50 a gallon. Some analysts are predicting $3 a gallon," said Hal Harvey, an efficiency expert with The Energy Foundation.
He says what's driving prices at the pump are the supply draining vehicles we're driving to the pump. "Half of the cars sold in this country are now sports utility vehicles or pick-ups or minivans and those get an average of about 20 miles a gallon compared to cars that get say 27 miles per gallon."
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But Ron Gold, the vice president of an oil industry supported research group, is not so quick to embrace the gloom and doom. "I'd be surprised if it went up as high as $2."
He points to last fall and forecasts for home heating oil price spikes. Heating oil was high he says, but refiners heard the call and hiked supply. "If things go reasonably well, the same situation should prevail for gasoline. Mind you, it doesn't mean that prices are coming down. But it does mean a crisis should be avoided."
But in energy-challenged California, Harvey says trouble's coming. Just not from the power source you'd expect. "I think gas prices are going to effect the average consumer more because they are going to be paying for it week in and week out. Electricity prices are going to be a real headache for those one or two hours they get shut off this summer. But for most people it won't be more than one or two hours."
In fact, California has the highest average price for a gallon of unleaded regular right now: $1.83. With all the talk of what could happen, keep in mind that's a long way from the record price an inflation-adjusted $2.56 a gallon, set in the summer of 1980.
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