« Why's the stock market rising? | Main | Saving versus paying off the mortgage »

May 29, 2007

Why are gas prices rising?

Rising gas prices: Although drivers may have gotten used to it, they still don't like it. Pump prices are up almost 90 cents a gallon from their low earlier this year. Call it a rite of spring, says N.C. State University economist Mike Walden. As flowers grow, so do gas prices. Listen

"Usually every year at this time as we move from winter to spring and then we approach summer, driving increases. People are out doing more things. Some folks are even on vacation. And we see a commensurate increase in gas prices," says Dr. Walden, a professor in the College of Agriculture and Life Sciences. "So part of it is just seasonal. This is just when gas prices go up.

"But there is one difference this year, and that is that we had a bigger drop in gas prices than was normal in the fall and winter. In other words, usually in the fall and winter, gas prices fall just like they rise in the spring and summer," he adds. "This past fall and winter we had a bigger than normal drop. Therefore gas prices this year started their upward climb from a lower base. And I think that's why people perhaps are a little more upset -- because they've seen a steeper rise.

"Again, looking at the future I would say get used to gas prices right now in the $3-$3.25 range," he concludes. "If we have some bad hurricanes particularly through the Gulf we'll certainly go higher."

Posted by deeshore at May 29, 2007 08:00 AM

Comments