AAA: $5-a-gallon gas likely in urban areas
AAA East Tennessee says $5-a-gallon gasoline is a possibility in more populated urban areas, but motorists in East Tennessee and Southwest Virginia could see a little less pain at the pump.
On a day when crude oil was trading at $106 per barrel, Don Lindsey, AAA East Tennessee’s public affairs specialist, said Wednesday that the fuel market is being pushed in many directions because of Iran, driver demand in the United States, and Wall Street trading. This is sending gas prices on a roller-coaster ride, he said.
However, Lindsey said if the traditional market trend for the Tennessee/Virginia area is any indication, the chances of paying $5 per gallon are slim.
“I think you will have isolated areas like Hawaii, San Francisco and places like that will go beyond $5 per gallon because they will switch to cleaner-burning blends,” said Lindsey. “A spike in springtime prices is likely here. That is due to the fact we are at a starting point we’ve never had before. Gas prices in January and February are at the highest they’ve ever been, so prices could go higher. But this is gasoline we are talking about. Nothing is certain.”
If you are driving anywhere in the three major cities in this region, it’s costing you more to fill up, based on an average 15-gallon gas tank, now than it did a year ago.
Data from AAA’s Fuel Price Finder online, www.aaaet.com, shows a $7.12 difference between 2011 and 2012 complete fill-up pricing using an average of $3.51 per gallon — the current median price in Kingsport.
Oil Price Information Service analyst Tom Kloza said in his monthly blog that there has never been such a diversity in the United States involving gas prices in different parts of the country.
According to a media report, drivers near the Walt Disney Resort in Florida were paying almost $6 per gallon on Wednesday, while stations in six states including southern Ohio, Montana, Utah and Colorado had regular unleaded posted at just under $3 per gallon.
The average price jumped 6 cents in the past week in Kingsport, while Johnson City had the largest leap in price in the past seven days with a 9 cent hike.
Saber-rattling in Iran, where 20 percent of the world’s oil is funneled through vessels in the Straits of Hormuz, continues to make traders on Wall Street nervous, sending price-per-barrel figures soaring, according to Lindsey, but he says anyone who can give you a definitive answer on gas prices right now is fooling themselves.
“You have to factor in the lowest demand (for gasoline) in decades here in the U.S.,” said Lindsey. “Some refineries are getting around that by lowering production and have been successful at that to keep prices up. For the last year, competing forces in the oil market are driving people batty when trying to budget for gasoline prices. Nobody really knows what is going to happen, and anyone who guesses about it is doing just that.”
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