Although gas price hikes each spring are commonplace due to seasonal demand, analysts are predicting that in 2012, the price at the pumps could increase as much as 60 cents per gallon by Memorial Day.
This year, some are saying that current issues are creating a perfect (enough) storm to spur such marked increases. These include tensions in Syria and between Israel and Iran, plus speculators hedging their bets on future commodity price increases. It’s reported these conditions could mean this spring’s price jump mirrors the scenario in 2008, which saw a rapid ramp up of prices at the pump during spring and summer before falling back.
Tom Kloza, of the Oil Pricing Information Service, said he believes prices will peak at an average of $4.05 per gallon this year, though in some areas, motorists are expected to pay even more.
“It’s going to be chaotic spring, with huge price increases in some places,” he said.
In the U.S. the $4 per gallon threshold is seen as the tipping point at which American motorists change both their buying and driving habits, tending to reduce distances traveled as well as considering the purchase of more fuel-efficient vehicles.
In 2008, high fuel prices temporarily decimated truck sales which made things challenging for Detroit’s big three automakers, two of which, Chrysler and General Motors ultimately required government financial aid to survive.
This time around, with more fuel efficient vehicles available, both from domestic and overseas manufacturers, any increase in fuel prices is expected to have less of an impact on the auto industry, though it will still leave many consumers vulnerable, especially as much of the population is already having to stretch each dollar that little bit further.