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FILLING UP IN BROWNSVILLE: FLUCTUATIONS
Comments 0 | Recommend 0Price increases have some wondering about down the road
Gregorio Larios winces every time he fills his van with gas.
A month ago it cost him around $45 to fill his Chevrolet Astro van, which he drives to fields across the Rio Grande Valley to pick tomatoes for a living. But over the past few weeks his gas bill has increased nearly 20 percent as the price of gasoline inches closer to the $2 mark.
In Brownsville, gas is selling for as much as $1.95 at some locations.
"Of course it hurts us," Larios said, leaning against the side of his van. "It's always going up and down, but it never stabilizes. It takes a toll on your wallet."
A year after record gas prices surged past $4 in some areas the question around the pump is how much further will gas prices go up?
According to a recent report by the U.S. Energy Information Administration, drivers should prepare for rising gas prices heading into the summer months.
The sluggish economy will keep prices from rocketing to the record heights seen last year, but prices will continue to creep toward an average of $2.23 per gallon and peak at $2.30, the agency reported.
Gas prices during the period between April and September traditionally rise as motorists hit the road for vacation. Lower prices compared to last year are also expected to encourage travel.
"We are projecting higher prices during what we call the driving season, but much lower than last year's prices," said Jonathan Cogan, energy information specialist for the U.S. Energy Information Administration. "We expect to see some seasonal uptick in consumption and that should lead to slightly higher prices."
The agency bases its projection on the recent price increases for crude oil and retail gasoline.
Last year, domestic consumption began to decline shortly after gas topped $4 per gallon, accelerating with the economy in a nose dive.
But prices do go up much faster than they come down, a phenomenon known as the rocket and the feather. That is, oil companies are quick to pass on the increased price of crude and slow to pass on price declines.
A number of factors influence the price of gasoline, including proximity to market, the refining process and taxes.
When the price of crude increases, or rockets, and production costs remain the same, oil companies make a lot of money.
In general, the lower the cost of crude, the higher the domestic spread.
For Larios, the upward trend could lead to changes to his budget. He wouldn't specify where he'd make cuts, but he figures he'll have to compensate somehow for higher gas prices.
"President Obama has done a lot of good things, but he's not worried about this," Larios said. "His gas is paid for. It's the poor that are affected most."
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