The U.S. Department of Energy says the price of gas will peak this summer at $3.60 a gallon, and at that level it will dampen consumption.
The peak price estimate is based on typical demand patterns. We'll hit that high price in June, the DOE predicts, barring any major international incident or disruption of existing supplies. At that rate, the price of gas will stay in record territory for most of 2008. And at those prices, the Feds estimate that demand for gas will drop somewhat, instead of rising as is usually the case during the summer.
This week, the average price for a gallon of unleaded gas is $3.33 a gallon -- 55 cents more than a year ago. Diesel is ranging at $4 a gallon, will average $3.62 a gallon for the year, an increase of 74 cents from last year -- which might explains why your Costco bill is growing nearly as fast as your gas bill.
As usual, the Department of Energy points to expanded demand in India and China for the boost in prices.