In early October, gas prices were dropping to the tune of about 1¢ per day, and prices at the pump were expected to continue getting steadily cheaper through the end of the calendar year. Over the past week or so, however, gas prices have abruptly shifted gears, with the incremental price decline quickly transformed into a sharp price hike. In some places, average gas prices rose 10¢ per gallon in a week’s times, leading many drivers to wonder: Who is behind the wheel, so to speak, of the forces controlling gas prices?
AAA’s Daily Fuel Gauge Report lists the current national average for a gallon of regular gasoline at $3.469. A week ago, the average was $3.396, meaning that gallon of gas has gotten about 1¢ more expensive each day over that time span. On Monday, the Associated Press reported that gas prices had risen 10¢ over the previous week in Michigan.
(GALLERY: Gas Stations Through the Years)
The price increase occurs after a five-week period when gas prices had dropped steadily. Even so, prices never dipped as quickly, or as low, as experts anticipated; some expected that the average gallon would sell for $3.35 by mid-September, and that prices would keep getting cheaper well into autumn and early winter.
What’s causing the recent reversal of what had been a much-welcomed price break at the pump? The Los Angeles Times cites one explanation:
One major reason for the increases was that the U.S. is exporting a considerable amount of fuel overseas, leaving the nation’s supplies more vulnerable to sudden price bumps if there are any refinery outages or jumps in the price of crude oil.
In any event, the experts who had once predicted a continued decline in gas prices are now foreseeing just the opposite. Patrick DeHaan, at GasBuddy.com, writes that it looks like the trend over the past week—steadily pricier gas—will continue in the week ahead, and beyond:
It’s a pretty easy forecast this week — gasoline prices will likely rise in a majority of areas … Overall, a lousy week for motorists, and I don’t expect it to get much better any time soon.
If higher gas prices stick around, it’s likely that car buyers will demonstrate renewed interest in hybrids and other fuel-efficient vehicles—which had seen a falloff in demand while gas prices declined.