Consumers are suffering from sticker shock at the rising gasoline prices.
Gasoline prices typically climb from February to Memorial Day on expectations of rising consumption and costlier summer-blend gas. But so far this year, prices are surging sooner and faster than ever before — up 47 cents since mid-January.
The Oil Price Information Service is forecasting that prices will peak at $3.95 by early April. Energy tracker Telvent DTN expects recent price jumps to slow to 5 cents a gallon a week over the next month. They believe it won't stay above $4 a gallon for long.
Others say prices will eclipse July 2008s record $4.11. The sluggish economy and high unemployment rate has done little to curb consumer demand. Political unrest in the Middle East, refinery problems or natural disasters could cause additional spikes in prices. The Oil Price Information Service said crude oil is now about $96 a barrel. It was at $145 when gasoline prices hit the $4.11 record.
Some analysts said several refineries have been shut down for routine maintenance, and in the eastern U.S., several refineries went out of business in the past year. That coupled with unrest in the Mideast and more cars being purchased in China have led to the higher prices.
Regardless of the reason, people only have a certain amount to spend. Higher gasoline prices will lead to less spending in stores, restaurants and on entertainment. The economy will suffer if gasoline prices don't go down.