Analysts: Gas Prices In Michigan To Spike Sharply...And Soon
DETROIT (WWJ) - You may want to fill the tank now as gas prices may soon spike — in a big way.
GasBuddy.com says motorists in Michigan, Indiana, Ohio and Kentucky will likely see a jump at the pump in the next two days as much as 45 to 60 cents a gallon, at even the cheapest service stations.
Patrick DeHaan, senior petroleum analyst at GasBuddy, says some stations have been keeping prices low, but losing money — and that can only last for so long.
"I would expect that in some cases, stations selling in Lafayette, IN, for example, at $1.66 per gallon could raise their price nearly 60 cents per gallon. It's likely they're selling somewhere 20-40 cents per gallon under cost to stay competitive, but that hemorrhaging will soon end and the station will restore some measure of sanity," DeHaan said.
DeHaan stressed that the price hike, which will come about a week since President Donald Trump's inauguration, has "not a single thing" to do with the new POTUS or his policies.
He said price cycling like this has already outlived the last three administrations, continuing with the same ups and downs since around the year 2000.
"The price cycling behavior is defined by this craziness, and the lower stations drop their price, the more people will believe a 'normal' price seems insane," DeHaan said.
So, how long will the higher prices stick around?
"It's just a bump in the road," DeHaan told WWJ Newsradio 950. "Almost within in a day or two of it (the increase) coming it will start to trickle down...a little bit every day for a couple of weeks. That's the way it works."
Looking to the future, DaHaan said Michigan motorists may not see a lot of those coveted sub-$2 a-gallon prices again for quite some time.
Prices will go up a bit in March and April, as they typically do — and don't expect any relief in the summertime. DeHann said it looks like prices for July and August may be 30 to 40 cents up from the same time in 2016.
