Economics professor, AAA differ on future of gas prices


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Taylor Ballek/ Staff Photographer Saugatuk sophomore Caroline Williams fills her car's gas tank Thursday afternoon at the Shell Gas Station, 718 South Mission St. "Gas prices are just ridiculous and keep going up," Williams said.

Saugatuk sophomore Caroline Williams fills her car's gas tank Jan. 7 at the Shell Gas Station, 718 South Mission St.  "Gas prices are just ridiculous and keep going up," Williams said. (File Photo by: Taylor Ballek/ Staff Photographer)

Saugatuk sophomore Caroline Williams fills her car's gas tank Jan. 7 at the Shell Gas Station, 718 South Mission St. "Gas prices are just ridiculous and keep going up," Williams said. (File Photo by: Taylor Ballek/ Staff Photographer)
Fueling vehicles across the nation did not go unnoticed in 2012.

The nation’s average cost of a gallon of gasoline in 2012 hit an all-time high at $3.60, according to AAA.

Despite never reaching the record price of $4.11 in 2008, 2012’s average was nine cents above the average record, which was set in 2011.

The peak last year was $3.94, and according to an article by the Associated Press by 2014, U.S. production will reach its highest level since 1988.

However, according to the Energy Department, the average price for 2013 will fall five percent to $3.44.

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Taylor Ballek/ Staff Photographer Saugatuk sophomore Caroline Williams fills her car's gas tank Thursday afternoon at the Shell Gas Station, 718 South Mission St. "Gas prices are just ridiculous and keep going up," Williams said.

The continuous rise in gas prices came as to no surprise to Samuel Raisanen, assistant professor in Economics.

“Gasoline prices increase with general inflation,” he said. “Additionally, as developing nations increase their energy consumption, the increased demand will continue to put upward pressure on prices.”

Last year saw spikes in gasoline prices due to reductions in refining capacity from Hurricanes Isaac and Sandy, as well as a refinery fire in California, Raisanen said. Other factors affecting the increasing gas prices included better fuel efficiency in cars as well as other transportation alternatives.

“Gasoline prices in Mount Pleasant tend to be 6-7 cents higher than the state average,” Raisanen said. “Gas prices in south-eastern Michigan tend to be lower due to the proximity to the Marathon Detroit Refinery.”

So far in 2013, the average price for a gallon of gas in Michigan has lowered to $3.28. The lowest state average is $2.95 in Utah and Wyoming, with only three states below three dollars. The highest average price in 2013 so far is Hawaii at $4.00, with the next closest state being New York at $3.75.

The consumption of gas in the U.S. is back down to 2002 levels due to the use of fuel-efficient cars and the moderate economy. It is not expected to rise this year or next, according to the Energy Department.

AAA forecasts the national average will peak between $3.60 and $3.80 in the spring, then drop to between $3.20 and $3.40 by mid-summer.

Whether the pricing has been affected by the recent election as well, Raisanen said no.

“Gasoline prices are driven by supply and demand of oil in combination with available refining capacity and gasoline taxes,” Raisanen said. “While the recent election involved much rhetoric about gasoline prices, there was little in the way of suggested policy changes that had any actual impact.”

One thing Raisanen does believe is that commuter students are greatly impacted as they have little choice, but to absorb the gasoline price increases by adjusting their budgets elsewhere.

However, students who live on campus can find other alternatives in transportation because of the size and convenience of campus.

Shelby Township sophomore Emily Harding fills up at Sam’s Club so it’s cheaper when she is forced to drive. Since the last time she filled up her vehicle, the price has increased an additional 20 cents.

“The last three years I’ve been driving, it has never been below $3.” Harding said. “I travel a lot and go home as well, so a lot so my credit card bills are normally over a hundred dollars from gas alone.”

Daisha King, a Detroit sophomore is not  optimistic on whether this year will be different.

“I think it will be higher this year, because everybody has to buy gas,” King said. “So they are going to make money the best way they can.”

King remembers a time when a gallon of regular gasoline was only a dollar, but now believes even seeing the price fall below three will never happen.

“It always gets so close to $3, but never goes below,” King said. “People are just used to this price range now.”


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