By Dennis Douda, WCCO-TV

MINNEAPOLIS (WCCO) — Think gas prices are high now? Just wait.

A former oil company president is predicting gas prices could reach $5 a gallon by 2012.

The current average price of gas across Minnesota is $3.03, according to AAA. That’s nearly 50 cents more than last winter and it’s the most we’ve paid in two years.

“In the U.S., we use 20 million barrels a day. We produce about seven. We’re not drilling. We’re gonna produce six about a year, year and a half from now,” said former president of Shell Oil, John Hoffmeister.

He’s part of a group that wants America to increase production to 10 million barrels a day, easing foreign oil dependence.

But Minneapolis commodities trader Gordon Kralovetz said because of a near monopoly, even more domestic oil may not help consumers at the pump for long.

“There are like six corporations that own 93 percent of it from the ground, into your gas tank. So, there’s no incentive for them to push the price any lower,” Kralovetz said.

Especially at a time when the world’s demand for oil is soaring, driving prices up.

Each time gas prices spike the experts tell us, use less, drive down demand and affect the price. But with global pressures pressing so hard that may not be the case this time.

“You know, China’s replacing us as the No. 1 user of gasoline in the world. So they’re going to be a huge factor. India’s a huge factor,” Kralovetz said.

Haji Abdow says there’s no way he can afford $5 a gallon gas.

“It’s like a rollercoaster, goes up and down,” he said.

So he hopes mass transit is up to the task.

“We have to have access to a lot of trains or busses, like Europe, you know,” Abdow said.

Luke Hjort already traded his construction  van for a small car. He said $5 gas will keep him close to home.

“Even going to visit my folks in South Dakota, it’d cost me about $400,” he said.

Kalovetz said when gas was more than $4 a gallon in 2008, our economy was a lot healthier.

Now we have far more people unemployed and lower incomes so expensive gas will hit harder this time around.

For that reason he said maybe demand will plummet and push prices back down, but not without great hardship.

WCCO-TV’s Dennis Douda Reports

Comments (56)
  1. Jenny says:

    The gas prices are controlled by the oil corporations monopoly and it will always go up when an election comes around. It has been a joke for years. I cannot believe the audacity of the oil companies to dupe the American people.

    1. Patrick says:

      Jenny, I was going to say the same thing. I could not believe how far and fast oil prices fell just prior to the 2008 election once the oil companies realized Obama might win due to how much anger was boiling over in the country. I have no doubt the oil companies will use the the price hikes to their advantage in 2012 to get a Republican back in. Prices will probably fall after that.

  2. Kevin says:

    I predict that in 2012 I will loose 40 pounds… a hottie half my age…..slow down my scotch intake…..and loose all those bad thoughts of my ex wife…her sister…her mother…her cousin…and her cat…….

    1. Erin says:

      For some reason, this comment just made my day. 🙂 Thanks Kevin!

      1. BusMan says:

        Kevin well put when it gets that high,folks will still pay,so dont let it get you down! But if it does a locking gas cap is a must.

        1. RON says:

          Ha! LOL Kevin, Now that’s funny!

  3. Brad says:

    Pure Greed. Oil companies should be ashamed of themselves, however the oil companies do not know how to be ashamed hence if you are a rich oil executive you have sold your soul to the devil himself. If we have $5.00 a gallon gas you can say goodbye to any economic recovery we have by then and hello another great recession. Give me a break!

  4. Andrew Mostovoy says:

    Maybe people should stop driving 5000 lb / 10 mpg Tahoes and Expeditions in America? Many European turbo diesel sedans get way beyond 50 mpg and GM is blowing their own horn for often questionable 30 mpg.

    1. Brad says:

      Good point, however one problem. These are oil executives we are dealing with. If we get sedans to 50 mpg and trucks to 30 mpg big oil will charge $10.00 a gallon for gas and diesel. Sorry to say but we are stuck. If you have a cure for greed then just maybe we can stop this cycle of big oil stealing hard earned Americans cash.

    2. Tony says:

      Hey Andrew, not all of us can drive little sedans as we have kids and they need to go places, like school, sports, etc. Maybe the single people with no kids should open their eyes that not everyone is alone like you. I have 4 kids and a wife, how would you suggest i drive a small car?

      1. Richard says:

        Hey Tony, the question you need to ask yourself is why you need a car to take kids to places like school, sports, etc. When we were living in Switzerland my (step)children did all these things. – They walked. America has condemned itself to this fate by encouraging fifty years or urban sprawl and it will probably take another fifty years to correct.

      2. BusMan says:

        Hey now Tony is it Andrews fault you both have that many children? Have kids myself,but the bottom line is you try to blame it on your being married and 4 children,you mad your bed you sleep on it as well have a good rest of the year,till 2012 gets here dont panic folks!!!

    3. insignificant says:

      sorry pal,but those li’l cars aint worth a spit in any snow…gas is controlled by the most greedy of companies…remember Rockefellers Standard oil who had deals with nazis in the WW2 era?…all about money…nothing more

      1. Tonya says:

        To Richard walking when it’s 30 below for kids are u serious? Also, with all the crime and sex offenders I am scared for kids. Not like the olden days.

  5. Kyle says:

    Listen up people, if you vote for the GOP, you support big oil companies. Don’t even try to argue otherwise. Ignorance is Bilss.

    1. John says:

      Oh Kyle….as if Obrutha has done us any frackin’ good!

    2. insignificant says:

      you’ve been duped…doesn’t matter GOP or Dems…all have the same corporate masters pullin’ their strings

  6. Shawn says:

    We need to hire some snipers to take out the oil execs. I will gladly donate to the cause!

  7. Ken says:

    Kyle, We have had democrats in the majority for the past two years how can the GOP be the reason gas is over $3 per gallon? If this article is accurate Obama will not have done anything to lower the cost of oil. you are niave to make such a ridiculous statement.

    1. Patrick says:

      Gas prices were higher under Bush. You may also remember that near the end of the Clinton presidency gas prices were under a dollar briefly. The oil companies realized they hit us too hard in 2007/08 and it cost them a Republican president in 2008. Did you notice how fast prices fell right before the election? It was too little too late. Once Obama got in they had nothing to loose so the prices crept back up. I expect they will be very high in 2012 and the angry mob will blame Obama and vote in a republican which is what the oil companies want. I would also like to point out that Obama has gotten new fuel millage standards approved despite the objections of the GOP and whining from yahoos who think it’s Un-American to require higher fuel economy.

  8. zinger says:

    The amount in taxes on gas the government has collected over the last 10 years dwarfs the profits of all the oil companies combined. hummmm oh… guess you all just kind of missed that fact…

  9. Shawn says:

    Dead wrong Zinger! Lets see some facts and actual numbers to back that statement up buddy. Multi-billions profit each year does not dwarf the taxes paid to the government.

  10. John LeVasseur says:

    5 dollar gas would kill this economy for good. Demand for gas in this country is dropping and will continue to do so with the introduction of electric cars.

  11. darren says:

    A map of each state with the amount of tax that a state charges for tax on a gallon of gasoline can be found at this link


  12. Kevin says:

    I promis no more massages….and white powder….and no more Donald Duck Cartoons…..

  13. Dan Peters says:

    I hope we DO see $5 gas…and soon. It’s the only way we will wake up and start funding mass transit.

    1. Brad says:

      Wow, you must have never been to small town America. You honestly think Mass transit will come to small town America? If it wasn’t for us out in the boonies you wouldn’t have your Mass transit. Don’t go wishing for such a ridiculous price for gas when that price would crush rural/small towns. I am not against the big city in anyway, however with how this country operates you need small towns to keep your big town alive.

      1. Tonya says:

        Brad, I so agree with you.

  14. Mark P. says:

    I live in Minneapolis, but am visiting relatives over Christmas in Norway. Gas here is $8.56 per gallon, so please don’t complain about $5.00 per gallon gas! We just need smaller cars and better mass transit.

    1. Tony says:

      Why do people think smaller cars is always the answers, those of us with kids do not have a choice to drive small cars, stop being so narrow minded on the topic please.

      1. Patrick says:

        @Tony. I’m not sure but I think people in Norway have kids as well. A You just have the same lens over your eyes that most of Americans are born with. I had it too until I wised up. You think you need way more than you do. You have been conditioned to be a consumer and not much more. You can say you don’t have a choice but ironically enough you really won’t have a choice soon. Before you know it you’ll be begging for a smaller car and more transit choices.

  15. Fascism says:

    If you make a color coded map, and use the color blue to symbolize the places in the country using the most oil. The Color Red to symbolize the parts of the country using the least oil.

    You will see it’s not big greedy oil companies causing the oil crisis.

    1. Patrick says:

      If you break that map down further by say county and use the same colors. You will find that the “red” counties use the most gas. Don’t try and blame liberals for this. if you saw a Prius driver arguing with a soccer dad with a SUV which one would you imagine votes GOP.

  16. Rumbolll says:

    I’ve spent a lot of time in Europe and spent a lot of money on gas getting about.
    Mark P., I can complain about $5 per gallon. Just because the people in the EU pay that much doesn’t mean they don’t complain. Maybe they pay that much because they do drive smaller cars and have better mass transportation. Perhaps that is why they pay taxes as high as they do. Supply and demand go both ways.

    And Fascism, your last statement was inane. Look up the word.

  17. A says:

    I think it will be frickin funny! Its about time too. I don’t want to pay that much either, but its all you slobs in the burb’s who consume everything in mass quantities and still want MORE MORE MORE!

  18. SgtUSMarine says:

    Blame Prez Bush.

  19. Kyle says:

    Ken, first if you can’t spell, your arguments are not credible. You sound like just another person who has been duped into your beliefs. I would guess that you are around 45 years old, white, and live in a $300,000+ home. If you don’t think the GOP is the party of big oil, you sir, are insane.

  20. c says:

    How come government wants to run our lives and tell us what to do and make us all dependent on it to survive, but they won’t step in and regulate oil companies in this country? Because they are the money and they run the government and it is their form of slavery: we are all bound to it and are blind to the reality of it. Why are all of our recent wars in oil-rich regions. We are all slaves to the rich oil companies via their control of the government.

  21. Andrew Mostovoy says:

    Arguing over whether it’s the Republicans or the Democrats is ridiculous. Politicians are pawns of whatever corporation or lobby interest they are catering to. If you think otherwise then you are either living in the dark or are young and naive. What has to change is our lifestyle and our expectations. When I am in Europe my friends consolidate tasks on trip, cost- analyze everything, drive fuel effecient vehicles and don’t commute from something like Rogers to Minneapolis burning 8 gallons of fuel per day with their 5000lb SUVs. Does Europe not have oil companies and greedy oil executives? Of course it does, where do you think companies like Shell and BP are from? The big difference is that society in Europe has adjusted and has become transporation-savy while we are living in the dark ages. Look at our closest neighbour – Canada. Every time I land in Toronto one of the first stark differences that I see is what’s on the road. Compare that to a city like Chicago and yes there are huge differences in what people are driving. Why? Because fuel in Canada has been more expensive for decades. Taxis are Nissans and Toyotas and car service vehicles run on propane. Where is that in our country and especially our city?
    Perhaps its that $5/gallon price tag that will finally change people’s behaviour and force standards in a different direction.

  22. Rodney says:

    No Republican, Democrate or Oil company executive sets gas prices. It’s the greed of OPEC that is to blame. OPEC is most of the middle east oil producing countries. When ever thier pocketbooks get light they lower oil production therefore causing the price of oil to go up, knowing the world will still be on thier door step begging for more. We need to reduce our demand for foreign oil by either drilling for more, using less, or even both! Now that our jobs have gone overseas China’s and India’s economies are booming! Our economy will not survive another spike in oil prices and they will not go down when it tanks again. OPEC will then be lining thier pockets with money from China and India.

  23. Andrew Mostovoy says:

    Message in response to @Tony: If you have 4 kids and a wife and they all need to travel at the same time do you feel that your only option for that is a big SUV? What do you think people in other countries do?

    1. Tonya says:

      Well for one if you know the laws kids need carseats till age 8 and also have to ride in the backseat so unless the take two cars probably not much of a option. Also, not everyone has mass transit in their area.

      1. Andrew Mostovoy says:

        Tonya, people all over the world have 3-4 kids. Somehow Europeans manage to transport children in car seats, in one vehicle and at 40-50 mpg. Large number of children does not equate to SUV or full size van. Remember station wagons? How about something like a Mazda 5? How about we mate a turbo diesel engine onto it? That seems to work all over the world, but our people are obsessed with size and power so yeah, that’w where the 10 mpg figure comes in. You can’t have it all.

  24. Tonya says:

    Gas goes up and everything goes up. Unless I were making 50 million a year It probably wouldn’t bother me. I don’t so I see what this will do to our economy. We will have full prisions due to people stealing to support their families. We will have less products at stores due to less truck drivers and less food due to less farmers. If you think that’s a good idea obviously you don’t have a heart. We have people without jobs, homeless and starving. One day, maybe your realize what we have done to this country and it’s not good we don’t care for our people.

  25. Tonya says:

    Hello you blame all the poeple driving big SUV’s. I am sure everyone can just go buy a brand new vehicle that gets better gas miliage give me a break. Also, what just let their current vehicle sit. Some people don’t have any common sense. Think before you speak. Also, it’s not cheap to fuel semis and farm machinery so it will put them out of business then we will all fight for food.

    1. Andrew Mostovoy says:

      I have plenty of common sense and think when I speak. I’ve seen and done this in other parts of the world and it works – “it” being alternate means. Have you?

      1. Tonya says:

        Not everyone can do what they would like. I do have a SUV and children. I live in MN on a curvy, hilly, street and a horrible driveway. My hubby and I have to have 4 wheel drive vehicles to get to work in the winter or not go out period. Either we have them or we wouldn’t have a job as we would never get to work. If you what MN winters can be like then you should understand. We actually both have cars too so we can have cheaper gas bills when the decent or in the summer. If I didn’t live here I would have 2 vehicles a car and a pickup. If we want a job we really don’t have a choice. If I lived in a different I wouldn’t have a SUV.

  26. J says:

    This has been coming for a long, long time. Yes, the price of EVERYTHING will have o go up. This is all a result of the fat lazy greedy american lifestyle. “I want evrything and want it now!”.. Well, the cold hard slap I’m the face is way overdue. All the people living the “good life” with your McMansions, three cars in the Suburbs.. Your house’s value will continue to plummet and your neighborhood will be the new crime ridden slums of America. You did it to yourselves. So deal with it.

    1. Tonya says:

      So you must be a billionaire as you don’t care that you will be paying twice the amount for everything. I am trying to save for my kids college and better our lives. I don’t want to pay $25 just so I can have tp and $10 for milk just for a few things to name. We already have made other countries better than us and we will keep doing it if gas prices go up. It already costs a lot to live here and it gets worse everyday.

  27. Hal says:

    Oil prices are not set by supply and demand. It is cartel pricing and pushed around by speculators with hefty ties to the oil companies. There is no incentive for the prices to drop. As noted, oil production is a pretty little monopoly – look at all the companies BP swallowed up to play with the big boys.

    We simply need to stick it to them where it hurts – using mass transit where possible and getting new no-gas-required technologies off the ground for real. This also means not voting anyone into office with oil ties to be bought off by the oil cartels. There is a reason oil is slimy – it matches those running the companies. It goes with the territory.

  28. Dave Seavy says:

    The one and ONLY way to bring gas prices down is for everyone to agree to not buying one drop of gas for a week. Unfortunately, that will never happen. People would rather complain that sacrifice a little for big long-term payoffs.

    1. jeff says:

      It is enevitable. At some point gas will reach $5 a gallon and stay there, then onto 6 per gallon, then, 10, 12, 14, etc. I’m personally excited for it, because it could help to end obesity; fat lazy Americans that rely on gas to get them literally everywhere, even if its across the street. Less pollution, better electric and train transportation. No more airplanes at 10 a gallon. It will be interesting, and change is not going to come easy. This is not about politics, it is the weight of the worlds massive population.

  29. Matthew says:

    America can solve this problem.. $5 gas will make other energy options affordable…natural gas, electric, and even gasoline produced from coal. Some entrepreneur will find a way-this is America, afterall.

  30. Pam says:

    How much more can people take. Soon I wont even be able to drive to work.