Brought to you by WBIW News and Network Indiana
Last updated on Thursday, February 16, 2012
(INDIANAPOLIS) - You’ve probably seen gas prices around Central Indiana around at $3.15 for a gallon of regular. But there is growing concern that gas prices will jump up in a big way, and soon.
Prices are currently going up because demand declines every winter and prices go down with the decreased demand. But this year, even with lower demand, we're still paying more to fill up compared to last year.
Some analysts say that's because of the anticipated spike in a few months. Those who invest in gasoline futures are indirectly driving up the pump price.
"People can become scared," said Greg Seiter of AAA, "and when they become scared, they hoard gasoline. They buy it unnecessarily. They'll buy every other day just to get the cheapest prices they can."
Seiter says such behavior actually creates artificial shortages in a given area.
Speculation of what will happen in the future is making the present more expensive. Concern about military action in the Middle East and Persian Gulf are feeding the concern, as some say Israel may take out Iranian nuclear facilities. The U.S. might get involved after the November election.
Add to those concerns new EPA regulations that put more stringent rules on refineries, coming at the same time some refineries are planning to shut down.
"We haven't had a new refinery built in the United States since 1973," said Matt Will, a professor of economics at the University of Indianapolis. "And we're going to have a total of five shutting down with in a five month period. So that is a significant reason as to why we're seeing an increase in the forecast for gasoline prices."
Will's data could mean we won't be seeing any break at the pumps any time soon. And we may see $4 per gallon gasoline once again this summer.
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