Wednesday, September 17, 2008

Gas Prices Rocket Upward on Supply Fears

gasoline prices Hurrican Ike September 2008Gas prices jumped nearly 19 cents on fears of shortages caused by Hurricane Ike.

The average retail gas price increased to $3.835 this week, up $1.04 from a year ago at this same time. The average price of diesel also remains high at $4.03 a gallon, up nearly $1.06 cents a gallon from a year ago.

The petroleum industry's pricing model is "Up like a rocket, down like a feather". So no one should expect to see prices come down anytime soon. Most likely, this is just a new plateau so that motorists will be happy to see such a "low price" like $3.75 gasoline.

Big Oil has us over the barrel. Even the fear of supply disruption, real or not, causes oil prices to spike. And who pays for all of these higher prices? We all do at the pump but also as these costs get passed on to food and consumer goods.

Source: Department of Energy

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