Breaking That $2 Barrier

by Nick Coons
Mar 9, 2005

The gas prices just keep getting higher and higher and higher. Last year our record average price was $2.16, and we're already back up to $2.07. It doesn't seem to be that much of a stretch to set yet another record. But do you want to hear something really disturbing? The Federal Energy Information Administration predicts that prices are going to rise another 20 cents per gallon than last year. That could easily put us in the $2.30/gallon range.

Businesses are starting to see the increased prices affect their profitability as well. This is hurting small businesses, because they either must maintain their pricing to remain competitive, or they must raise their prices to make up for the extra costs, causing a potential loss of business due to higher pricing.

This will be our third summer of $2+ gas pricing, so I guess at this point it should be no surprise. Everywhere you read about gas pricing, they tell you that no one has any idea why the prices are increasing, or that the increase in price is due to an increase in the cost of crude oil. Crude oil pricing has been right around $50/barrel, sometimes a little more. The pricing of gasoline does not seem to follow that.

But it doesn't seem that there's a whole lot we can do about it, other than not buying gas. Though for many people and businesses, that's simply not an option. Since gas is used to transport everything, we can also expect an increase in price on various other products across the board, like groceries.