AP: $4 Gas Is Nearly Here

April 25, 2007
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The Associated Press’ report last week that $4 a gallon gas was on its way should send a shudder through every reader of TheCarConnection.com.

While we’re not global-warming enthusiasts like some of our readers and colleagues, we do believe that using less gasoline helps lower prices and will one day disentangle us from dealings with medieval dictatorships in the Middle East, South America and western Africa. And frankly, the specter of $4 gas makes a $50 fill-up for our Prius a little frightening.

Last winter, we saw gas in the Atlanta and Detroit areas drop to around $2.50. Now, a month away from Memorial Day, we’re already seeing prices at $3.50 a gallon—and last weeked in San Francisco, a sign with $3.97 premium caught our eye.

The problem is, once again, demand. All the world’s major economies are ticking along nicely. In the U.S. and China, demand has never been stronger for refined oil. And that’s why the situation is so precarious, if you care a lot of about paying a little more for gas.

Analysts said earlier this year that average prices were going to remain stable for the foreseeable future. Now, as the AP reports, prices are moving faster than any time since the twin hurricanes, Katrina and Rita, took out a third of Gulf refining capacity. While average prices nationwide are still less than $2.90, we can easily see an average breaking the all-time, inflation adjusted price of $3.11 a gallon by the time July comes around. And they could hit $4 a gallon if any of the “big three” hits: cataclysm in the Middle East, refinery outages across the United States, or another big Gulf States hurricane that undoes repairs in the wake of Ivan, Dennis, Katrina and Rita.

Where do you think gas prices are headed? What do you plan on doing to save gas and save money? Tell us here, and stay tuned for more on gas prices over at the main site.

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