Gas Price Accelerates Past $4 Barrier
The average price for a gallon of gas is above $4 for the first time since the summer of 2008. The tumult in the Middle East, especially the ongoing war in Libya, is pushing up the price of oil on international markets. Oil cost more than $114 a barrel on Monday. That has a direct impact on the price of gas.
"When the price of oil goes up a dollar a barrel, you can expect to pay another 2 1/2 cents per gallon at the pump," said UCSD economist James Hamilton. "And we've seen about a $20-dollar-a-barrel move in crude oil prices from the Libya developments." That's bumped up the price of gas about 50 cents a gallon in the past month.
Hamilton is not sure how the crisis in Japan will affect fuel prices in California.
The Utility Consumer's Action Network tracks prices at hundreds of local stations. UCAN's Fueltracker.com puts the average price at $4.03. That's 92 cents a gallon more than at this time last year.
"We're seeing fear driving the market and driving oil prices higher. All those things combined make for uncertainty and when you have uncertainty you tend to get higher prices, whether there is a glut of oil or a glut of gasoline or not," said UNCAN's Charles Langley.
The gas price on January 1 is usually the lowest price of the year. That price this year was a record high for the day.
"So if we started out with the highest price ever," Langley said, "this year may show us the highest price ever for gasoline, which in San Diego is $4.64 a gallon."