Indystar.com reports: Only a few days into the new year and gasoline prices are headed up again around Indianapolis, probably flirting with $3 a gallon in a few days and potentially rising close to $4 by summer.
Many analysts are blaming the recent rise in the commodities markets, where traders are gushing cash to buy oil futures and sending the price of a barrel of oil to levels not seen in more than 15 months
PUMP PATROL: Lowest gas prices in the Indy area.
The frigid weather gripping much of the nation also has squeezed heating oil supplies, helping push the price of crude to $83.18 on Wednesday, up $1.41.
In Indianapolis, the price of a gallon of regular unleaded gasoline at many stations has risen nearly 20 cents in the past week to $2.79.
The average price in Indianapolis on Wednesday was $2.68, according to AAA and the Oil Price Information Service.
Some analysts expect the price to go up even more by the weekend — to its highest point in more than a year. And that is raising concerns about whether overall consumer spending could be pinched at a critical juncture.
“We’re all still dealing with a fragile recovery in the economy,” said AAA national spokesman Troy Green. “We have to ask if (a lingering price increase) would stunt this recovery.”
The expected weekend price increase prompted many motorists to fill up on the cheapest gas they could find Wednesday, causing lines at stations still selling fuel for as low as $2.59 a gallon.
Alan Atlas filled up at Costco at 9010 N. Michigan Road. He found the pump price of $2.59 a gallon to be a bargain despite the $50 annual membership fee he must pay to Costco to take advantage of its prices.
But no one will be totally spared from the current run-up, which likely will only be accelerated by the traditional spring rise in gas prices.
Gas prices usually climb from January to June, in time for the summer driving season. In the past four years, the spring price increases have varied from 20 percent to 55 percent.
“If we assume a spring run-up of approximately 30 percent, that means we’ll see gas around $3.50 by June,” Green said.
A 55 percent increase would push the price to about $4.16 a gallon.
Average gas prices in Indiana haven’t topped $4 since September 2008, when they hit an all-time high of $4.17.
Tom Kloza, publisher and chief oil analyst for the widely quoted Oil Price Information Service, predicts a price increase by the weekend.
But he predicts a bit of a reprieve later this month.
“By the time the Colts are marching through the playoffs, we’ll see prices back off,” Kloza said.
But even a Colts’ Super Bowl victory won’t protect consumers from the traditional spring run-up. And some are already feeling the pain.
Kathy Jordan had to fork out $2.79 a gallon for gas at a Westside BP station Wednesday.
She decided not to fill up so she could keep some money for herself.
“I’m budgeting,” she said.
