Average gasoline price (3/10/2010) = $2.77
Once again, Americans are faced with gas prices that seem to be rising almost constantly … the average price of a gallon of gas hit $2.70 this past Thursday, according to a statement released by AAA. At the station I usually go to, gas was $2.67 when I filled up my car last week – it was $2.49 a few weeks earlier, and the price was listed at $2.79 when I passed the station yesterday!
What is going on?
According to CNN, heavy snows and frigid temperatures across the United States over the past month have reduced gasoline demand, as people are driving less. Even so, the frigid temperatures have driven up the demand and therefore the price) for other types of fuel, especially the crude oil that is refined into heating oil. The rising demand for heating oil has caused the price of crude oil to spike sharply upward over the first three months of the year. Prices have been rising steadily ever since, with light, sweet crude oil rising past $80 a barrel in January and remaining high ever since. Oil prices have remained high ever since, and currently stand at $81.45 a barrel.
For consumers, the price of a gallon of gas at the pump doesn't seem to follow any predictable pattern.
A recent report from the government's Energy Information Administration revealed that, overall supplies of crude oil and gasoline in storage are growing faster than current demand.
But with “spring break” season approaching, its easy to chalk up rising prices to "manipulative" oil companies “anticipation” of greater demand due to increased travel. Consumer anger toward the oil companies may not be entirely misplaced. Where in most industries the price of a commodity lags behind changes in supply and demand, the oil industry seems to have perfected the art of raising and sometimes lowering prices in anticipation of changes in demand. Predictably, oil company executives are much more willing to raise prices than lower them – leading to record profits, even as most other sectors of the economy struggle to recover.