Three weeks ago, with crude oil prices plummeting and the stock market in turmoil due to the U.S. debt downgrade, experts foresaw a steady decline in gas prices for consumers. Indeed, prices dipped for a while, but now, after the national average price rose 5¢ per gallon over the past week, the typical gallon at the pump costs just 2¢ less than when those predictions were made.
According to the AAA Daily Fuel Gauge Report, the current national average is $3.61 per gallon of regular gasoline. A week ago, the average was $3.56. Experts had been predicting lower gas prices by the day throughout late summer and early fall, with the national average reaching perhaps $3.35 a gallon by mid-September.
Meaning: The predictions were flat wrong. What happened?
Well, first, the chaotic situation in Libya caused gas prices to plateau, then rise a bit. Then, toward the end of last week, reports CNN, with Hurricane Irene threatening oil refineries along the East Coast, the price of gasoline futures spiked due to fears the storm would cause an industry disruption. This is translating to an increase in consumer prices at the pump, and prices are expected to keep rising this week in the aftermath of Irene.
Within a couple days, the average gallon of gas will probably be selling for the exact same price as it did three weeks ago—at which point experts had predicted a swift, steady decline in gas prices. What’s more, this week ends with the Labor Day holiday weekend, when an annual increase in both road traffic and gas prices occurs like clockwork. This is likely to take place even as AAA says fewer people will be traveling for Labor Day this year.
Isn’t it amazing how many different justifications they can come up with to hike gas prices?
For a variety of reasons, it looks like you’ll pay more for gas this weekend than you would have at the moment the experts said gas prices would plummet. And the prospect of $3.35 by mid-September? Dream on.