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Economists: Expect Even Higher Gas Prices This Summer

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(credit: CBS) Holly Wagner
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By Holly Wagner, WCCO-TV

MINNEAPOLIS (WCCO) — Have you had to fill up your gas tank in the past couple of days? It’s painful!

The going rate is now $3.79 a gallon and economists say it won’t stop there.

Other states including Alaska, California and Hawaii are already seeing prices above $4 a gallon.

Nina Guertin says on an artist’s salary, it’s a drain.

“I don’t like that,” she said. “For me to do a complete gas up that’s a big chunk of my change for the month, if I do two or three gas ups for the months.”

At $75 a tank, Guertin will be spending more than $200 a month to gas up her SUV.

Economists attribute this latest price hike to a number things — the price of oil is up to $108 a barrel, unrest in the Middle East continues and fuel refiners are in the process of switching over to their more expensive summer blends.

Economists say businesses are feeling the pressure from suppliers because of the recent increases.

At Sheffield’s Floral Shop by the University of Minnesota, delivery costs went up in the last month because of rapid spike in gas prices.

“I think how we’re affected the most is customers really wonder why it’s so expensive to get things delivered and that can be pretty discouraging for them if they want a nice arrangement and they think it’s really overpriced to get it delivered,” said florist Courtney Galman.

She said the delivery costs at the floral shop went up 50 cents. That may not sound like much, but there are other businesses doing the same thing and that adds up for consumers.

The last time gas prices were this high was in 2008. Last year at this time motorists were paying $2.77 a gallon.

Professor of Economics and Finance David Vang at the University of St. Thomas thinks gas prices will hit $4 a gallon by summer.

Vang expects to see some fluctuation with prices depending on the situation in the Middle East. He said he doesn’t expect to see prices get much higher than $4 a gallon in the Midwest.

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