It’s still early April and the national average for a gallon of regular unleaded gas is just shy of $4/gallon — up $0.17/gallon from a month ago. This begs the question… Once the summer driving season hits, how high will gas prices go?
For the record, as I write this, the lowest reported price in the country is $3.12/gallon in Parlin, NJ and the highest price is $5.79/gallon Death Valley, CA (source). Today, I paid around $3.85/gallon.
Some experts are saying that gas prices could reach a national average of $4.50/gallon, with the average in California topping out around $5/gallon. That would be higher than the record prices of 2008 when the national average rose to $4.114/gallon and California topped out at $4.588/gallon.
At the same time, others are saying that gas prices will once again spike this year, but will fall short of the all-time records. For reference, gas prices surged last spring but then moderated over the summer.
Whether gas prices end up going pretty high or really high, a major concern is what impact the price of gas will have on our fragile but recovering economy.
According to a recent Gallup poll, gas prices would have to rise to somewhere in neighborhood of $5.30/gallon before the average American would significantly reduce their spending in other areas or otherwise change their lifestyle.
What do you think? How high will gas prices go during the coming year?
Please also share in the comments your thoughts about how high gas prices would have to go for you to make significant budgetary (or other) changes — assuming that we haven’t already crossed that point.
11 Responses to “How High Will Gas Prices Go?”
The average american doesn’t care about gas prices. They just toss the charge right on top of the mountain of debt that’s already on their credit cards. When they max it all out they’ll file for bankruptcy and shrug it off.
I wouldn’t be surprised to see gas rise to the $4.50-$5.00 range but it won’t stay there long. With today’s dismal jobs report and expected weakness this earnings season, I think demand will begin to taper off and gas prices should fall by the end of the year. As you point out, higher gas prices will have an impact on other buying decisions but it’s the unemployment situation and continued weakness in housing that’s playing a bigger role.
Seen from Europe, 5$ per gallon is ridiculously cheap. Here, we pay between 8 and 10 $$, so people really think about wether they have to drive. A friend from Rome told me last week that the traffic there has decreased about 20%.But I think the Americans depend too much on the individual traffic, because public transport has been neglected for a long time.
Regardless of how high the price goes, the only thing that’s going to bring the price down is the next recession… It’s going to get uglier.
gas 4.09 here in upstate ny. and i make 36k in retirement home paid for and i have cut back on traval and spending for even needed things so all ready hit my income level and i am above the average income !!! anouther recession all ready here and so many people are too blind to see it hang on bumpy ride coming all will know buy august lot worse then in 2008 !!!!!and most will say i didn’t see it coming why did i loose my job ??? i can see 30% or more unimployment and this the goverment will not be able to hide any longer
My prediction: if gas hits $5 a gallon, it won’t stay there long because it will force another recession.
I don’t see people changing a lot even if it goes over $5 per gallon. For me, I’m looking into options for buying a bicycle – way better miles per gallon on those!! 🙂
I paid $4.22 today, and that is crazy. I’m all for making a buck, but why are prices going up? Product scarcity? Production costs? Delivery costs? I could live with any of those. Or is it just greed? Or wall street? (not that the two are much different). Sadly, I do have a day job and need to drive to work so I don’t have many alternatives, too far away for any direct public transportation.
I agree with the other commenters that $5/g gas won’t effect many peoples driving habits. I think gas needs to get higher than that. All that will happen in the meantime are lots of news and magazine stories about why gas is so high, and the same tips on how to lower your spending. Of course, you’ll hear everyone complain but doing nothing to change their habits either.
It’s around $4.50 in the north Chicago suburbs and I haven’t noticed much difference in traffic. Even this morning I was should I take the normal car that gets 25+ MPG or the 5 speed, supercharged (really it is) Mustang that needs premium gas @ $4.80 and gets 18-19 on a good day when I stay out of the boost. ‘Stang won and it felt good when I could blow by that Prius that was holding me up on a side road with a chirp on the up-shift when I was next to him. 🙂
I doubt the average American would change their habits much if gas did top $5/gallon. Here in Canada it is already past that price. Where I am it is about $1.42/liter (times that by about 4 to get the gallon price). People still drive around wastefully, but they just complain about it more. Since people love their cars so much, they’ll always fit in their budgets and keep on spending like normal.