If you have a car and have to pay for gas, you know that gas prices are once again at an all-time high. According to the American Automobile Association, U.S. average retail gasoline prices hit an all-time high on Tuesday, Mar. 23 with the average price for regular gasoline costing $1.738 per gallon. This is not supposed to be the worst of it either. The U.S. government predicted on Monday, Mar. 22 that gas prices would average $1.83 per gallon in April and May. This would be a record and precede the highly traveled season of summer. Motorists in north Texas and other urban areas can expect to pay a bit extra in the summer because fuels are used that are designed to minimize air pollution.
Guy Caruso, head of the Energy Information Administration, is very concerned with U.S. gasoline inventories. Inventories are running about 13 million barrels lower than his agency had predicted. This would make U.S stockpiles near their lowest levels since the 1970s.
The oil-producing group OPEC, which controls about half of the world’s exported crude oil, is debating whether to further cut global supplies starting in April. This would add to production cuts that have brought oil prices to almost $40 a barrel.
Despite all this negative news, John Gerdes of Southwest Securities in Dallas has a more positive prediction. He said cold weather in the Northeast has put a demand on crude oil inventories to make heating oil for homes. That demand will fall come the arrival of warmer spring weather and the heavy driving season won’t begin until Memorial Day. Gerdes predicts that they will be some “breathing space” to make up lost inventories. Although the gas price hike annoys most consumers, some feel Americans are acting like babies when it comes to shelling out money for gas. Though most want it cheaper, some people feel we are getting a bargain when it comes to gas. In other countries, prices are much higher than what we pay here. One of the most expensive is Hong Kong where they pay $5.34 a gallon. Other expensive areas are London at $4.55 a gallon and Paris at $4.41 a gallon.
Regardless of what other countries pay, Americans still think gas is too much here and it is becoming an issue with lawmakers from both Democratic and Republican parties. It will most likely be of importance during this presidential election year. Already, lawmakers have been working to reduce gas costs. Sen. Ron Wyden (D-Ore.) reintroduced a bill on Monday that requires the Federal Trade Commission to act on what he called anti-competitive industry pricing policies. The FTC has already opened a probe into California’s retail gasoline prices, which are the highest in the nation.
Despite any accusations, oil and gas refiners deny using anti-competitive practices. They blame the high prices on tight supplies caused by the many different rules for blending gasoline for urban areas.
The White House and Republicans in Congress have also been pushing for a new energy bill that has tax incentives for producers. The bill contains provisions that would exempt some production from “marginal wells.” These are wells that produce five barrels of oil a day or less. The bill advocates that if crude oil prices drop below $18 per barrel, then these wells could be exempt from some production. Texas has many of these wells and “there is an equivalent of a year’s import from Saudi Arabia in those wells in Texas” according to Hutchinson.
It’s apparent that many things need to be worked out with these oil and gas issues in order for the prices to get lower and stay there. In the meantime, save up your money because gas prices could be putting a bigger dent in your wallet than you’d like.