When president Obama took office in 2009, the average price of gas in the United States was $1.79 a gallon. Now, the average price per gallon is $3.58 and is expected to keep rising. By the summer months, the price is predicted to be approaching $5 per gallon.
Many blame President Obama for this price hike, since much of the increase has occurred since his election. However, some feel the most significant reasons for high prices lie beyond the president’s purview.
The number one reason for high gas prices is the steep increase in the price of crude oil, the raw material from which gasoline is made.
As the U.S. Energy Information Administration explains, “The gradual improvement in the U.S. and world economies in 2010 and the political events in the Middle East and North Africa in early 2011, the source of about one third of world oil production, contributed to the increases in crude oil and gasoline prices in 2010 and 2011.”
One fifth of the earth’s supply of oil comes from the Persian Gulf. Dependence on these rich reserves is currently necessary, but it is also dangerous thanks to the ongoing volatility of the Middle East, and in particular to threats that Iran may block transportation routes. These concerns contribute substantially to the price increase.
In spite of the expense, many industries are using ever-increasing quantities of petroleum and oil. Forward-thinking companies are stocking up on these goods before prices get even higher-which further increases demand, and thus prices.
So what does this mean for summer drivers?
Prepare for added strain on your wallet. Patrick DeHaan from GasBuddy.com tells USA Today, “It’s going to be a nasty year for gas prices.” Indeed, estimates suggest that drivers may pay $4.20 a gallon in California and $3.91 in New York.
The best advice: Pinch those pennies. You will need them.
Sources:
MSNBC; NBC Los Angeles;
USA Today; www.eia.gov