US Gov't: A gallon of gas will cost $3.50 before June
Ah, Spring. Astronomically it starts on the vernal equinox (March 20) and ends on the June solstice (June 21). Greek goddess Persephone's kidnapping by Hades (see painting) represents the changing of seasons. This year, Persephone wants a big offering at the gas station temple. About $3.50 a gallon according to the EIA's Short-Term Energy Outlook US monthly projections to Dec 2009. Here is the great news, if you own a gas station:Retail prices for petroleum products are expected to increase in 2008, pushed up by the higher average crude oil prices. Both motor gasoline and diesel prices are projected to average over $3 per gallon in 2008 and 2009, with monthly average gasoline prices peaking near $3.50 per gallon this spring.
The national average price of gas this week is $3.11. So within three to six months, expect about a forty cent jump in the price of gas. Of course, prices vary around the country, so you might see $3.75 for a gallon of gas if you live in, say, California. Also, $3.50 is what DOE expects due to Summer demand alone and not unexpected things like war, weather, OPEC, etc. Either way, looks like another bumper year for the oil companies. They just can't keep that stuff on the shelves.
Related:
[Source: Reuters]
Reader Comments (Page 1 of 2)
GreatGreenHammer 8:54PM (1/09/2008)
I'm not sure even gas station owners are happy about the soaring price of gas. Their profit margin on gas remains static no matter where the price goes. They basically operate like movie theatres do, they sell "concessions" and derive their profit that way. With gas so high, discretionary income drops, and people tend to buy less funyons. (IF YOU CAN IMAGINE SUCH A THING!)
Reply
Lascelles Linton 9:43PM (1/09/2008)
GreatGreenHammer, That's debatable. Price go up with demand. Sure, margins, (which sounds like something a gas station would say) might be lower but over all, profit is probably up because they have so much more business. What about when prices go down? They make more money then right? They are probably glad to see it go as high as possible so it can fall further. Which is will like it does every year. I think gas stations are happy.
Reply
Mort 10:16PM (1/09/2008)
I hope it goes up to $10 per gallon. Give New Hampshire to the Taliban!
Reply
Derek 10:28PM (1/09/2008)
I was paying $3.50 last June in the Detroit area (which probably means I'll pay more than that this June). But I don't think that's a crazy price or anything.
I would really be interested in knowing what the average price per gallon is worldwide.
Reply
Joseph 1:00AM (1/10/2008)
http://www.washingtonpost.com/wp-dyn/content/article/2005/09/07/AR2005090701954.html
I don't know how accurate this article is, but the profit margin for a gallon of gasoline sounds like what I've heard in the past. The article said that gas station owners make about 8 cents per gallon at best. It was written in 2005.
http://www.nacsonline.com/NR/exeres/0000177dzwurelixmmouwejq/PressReleasePosting.asp?NRMODE=Published&NRORIGINALURL=%2fNACS%2fNews%2fPress_Releases%2f2007%2fpr021207%2ehtm&NRNODEGUID=%7bFAF45C11-2850-4FCC-A825-DE53F66A0607%7d&NRQUERYTERMINATOR=1&cookie%5Ftest=1
According to the National Association of Convenience Stores, a gallon of gas may bring just a penny of profit. It may be somewhat biased, but this article is muc more recent, from February of 2007.
Reply
Ernie 12:43AM (1/10/2008)
Watch me care. It's already *$4.20* a gallon here.
Oh, and has anyone really changed their driving habits? Well, for a few weeks they did (some even held out for a month or two), but then they went right back to their cars.
Reply
Rick 12:42AM (1/10/2008)
I'm currently paying about $1.10 per litre which works out to $4.20 gal. I'll be likely paying $5. by summer. It's not so bad. Seems funny to hear people complain about $3.
Reply
Nils 2:13AM (1/10/2008)
We're at $8,45/gal over the pond and people are still not changing driving habits. SUV sales have never been so high in Europe.
Reply
Nils 2:13AM (1/10/2008)
We're at $8,45/gal over the pond and people are still not changing driving habits. SUV sales have never been so high in Europe.
Reply
Mack 2:48AM (1/10/2008)
Where I live which is quite in line with the norm.
It is pretty tough to change or reduce your fuel use when there are no other options.
Light rail and rail meet much opposition through smear campaigns.
I have read that tomorrow's cars may drive without human intervention. Great. Now where do you use the rest room? The next great invention will be the toilet seat. The toilet seat for the auto should come before the driver less car for obvious reasons.
It is time that we reuild the rail system so that we can enjoy the auto. Its that simple.
Reply
MadAsHell 3:23AM (1/10/2008)
If we could just impeach the guys in the white house today... and put a stop to the oil war... we might all save a lot of lives and OUR $%#@#$% MONEY!
Reply
Dad 5:12AM (1/10/2008)
"Here is the great news, if you own a gas station:"
What IDIOT would ever write this? I mean, this comment betrays a total lack of understanding of the retail gas market.
Reply
Markus 6:33AM (1/10/2008)
@Derek
I don't know any websites with global gas prices, but here in Germany it's looking like this right now:
Gas (95)is at a national average of €1,397 per litre which comes to about US-$7.71 per US-gallon with current exchange rates.
Diesel is at €1.27/l which comes to about US-$7.06/US-gallon (this will hopefully drop some more again once this winter's heating period is over)
Reply
Phil L. 7:54AM (1/10/2008)
I've got to disagree with Lascelles on the "great news" aspect of this story: Most reliable information I've seen suggests gas station owner profit on gasoline sales is pretty static. The real money for the station owner is made on secondary sales - which can be affected by the consumer's perception of how drained their wallet it. For the gasoline itself, it's the wholesaler that's really calling the shots.
These two sources indicate gas station owners would prefer lower prices, for reasons commented on above:
http://www.msnbc.msn.com/id/11414134
http://www.npr.org/templates/story/story.php?storyId=10733468
Quick case in point: A long-time Texaco station is right next to where I work. It's been a gas station from another era: Three real service bays, but only a few food item selections.
A spiffy new gas station/convenience store combination opened up across the street from the Texaco station last year. I talked to the Texaco owner: He simply couldn't match them on gas price.
So I wasn't terribly surprised when the backhoe showed up a few months ago - and pulled out the Texaco station's tanks. The pump canopy is gone and gas sign is down. It looks like he's trying to make a go of it doing auto service only. But I also know he's close to retirement. Personally, I don't expect the business will make it.
Reply
Owain Ozymandias Buck 8:06AM (1/10/2008)
"I hope it goes up to $10 per gallon. Give New Hampshire to the Taliban!"
Dude, I have no clue what you're trying to say there--it's so WTF obscure--but it's funny on so many levels! Regardless of your politics or world view, that's good, thanks!
Bright side--maybe this will help keep pushing innovation and efficiency.
This will hurt fuel retailers--they catch the most hell for passing along their costs. Fuel is a slim profit margin business, if you're a retailer.
Reply
peasler 8:41AM (1/10/2008)
I want my Th!nk City electric car!!
Phil
Reply
BlackbirdHighway 9:28AM (1/10/2008)
And some lucky SOBs might even have their Teslas by then.
Reply
Matthijs 9:32AM (1/10/2008)
Like Rick 5. said. It's really funny why Americans complain about $3 a gallon.
Can someone explain to me why $3 a gallon is expensive? Maybe because almost all cars have V6 or V8 engines?
I live in Holland (next to Germany) and I now pay with current exchange rate $8.80 a US Gallon! Now they are starting to complain about the high taxes on fuel! But we still buy SUV like crazy and drive like maniacs not concerning fuel economy.
I want an electric car yesterday.
Reply
Tim 9:35AM (1/10/2008)
This will continue to get worse as the US $Dollar collapses because YOUR politicians refuse to obey their oaths of office and obey the limits placed on them by the Constitution. You voted for them! It’s YOUR FAULT.
Reply
l.wood 10:05AM (1/10/2008)
It is heart warming here in the U.S. to be the beneficiary of total incompetence on the part of our elected officials. A more bumbling bunch of botch boobs would be hard to find.
Reply