Per usual, there seems to be some uncertainly when it comes to the future of fuel prices as we head toward the annual summer driving season. I guess that is why most consider energy futures (and life as an OPEC member) "exciting." According to the Department of Energy, we are likely to see prices reach only $2.81/gal. on average this year, as was described recently on NPR's Morning Addition and was republished by our friends at Daily Fuel Economy Tip. The only issue is that according to Gas Buddy, we have already breached that level as recently as, well, this morning, as our current average is $2.83.
Traditionally, the season (as it were) doesn't officially start until some time in May, typically Memorial Day weekend as people embark on the first of their many weekend jaunts and drives. And with a healthy chunk of the country currently getting the equivalent of a Jack Frost enema, it doesn't appear that this year's season will come any earlier. Therefore, it is pretty safe to say that our consumption is only going to rise with the level of the mercury meaning there may not be a whole lot of substance in that $2.81 figure.
So much for looking to government agencies as an accurate predictor of the futures markets.
The uncertainties, however, aren't just limited to what the prices will actually be, but also what will happen when they get there. The Daily Fuel Economy Tip guys cite a recent poll that shows that some 74% of drivers claim that $4 petrol would affect their summer travel plans. They follow up that argument with another post stating that people would likely still pay $5 or even $6 a gallon for the freedom of driving their car and feeding it too. So, what's up?
Well, there are several things probably going on, but for starters, a spike in gas prices as illustrated by a quick run up this spring to $4 would likely cause a shock and change in short-term plans. This should not be confused, however, with that magical figure where people give up (or severely curtail) driving in general for some other means of transportation. Is that figure currently $5 or $6 a gallon? Who knows, but many cite comparative (though not relative) pricing of fuel in other countries where the equivalent in US dollars would be much more expensive still.
Any way you burn it, the price of fuel is still up some 250% over the last five years or so. And, as is illustrated here by Consumer Reports, this does, in fact, influence driver (consumer) behavior. When you consider that fuel prices are often simply passed down the line to everything from the price of airline tickets to the price of milk, it is little wonder why.
How high are you willing to go?
I'm not surprised at all that the predictions have been off. I'm not entirely sure how everything is going to play out, but if people aren't getting the hint yet that we need to become energy independent I don't know what will convince them.
Posted by: DurAlt | April 17, 2007 at 01:05 PM
But any ways the details are more important than anything else.
Posted by: Used cars sale | October 22, 2010 at 06:57 AM
The consumption and price of the gas fuel will be increased day by day. The OPEC countries are not able to pump more oil to the market so the burden is on gas fuel hence its price will go up.
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Posted by: fuel | April 11, 2011 at 05:43 AM
It's expensive for me. T_T
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