PUBLISHER’S COMMENTARY: Need a second mortgage to finance the next tank of gas for your car? Get used to it. Those who know say prices will keep going up and should hit $2.35 a gallon by Memorial Day. Don’t expect any relief from the government. President George W. Bush owes his soul to the oil companies and the devils have come to collect.
With gasoline prices rising daily for weeks, Americans are on notice to get used to pain at the pump: The U.S. government is predicting that the price will hit $2.35 a gallon by Memorial Day and stay high into next year.
The nationwide cost of regular unleaded topped the charts Monday at $2.276 on the daily fuel-gauge report posted by AAA, the nationwide auto club. So tanking up the family SUV last weekend topped $50.
Economists expect consumers to curb their spending by such moves as packing one more brown-bag lunch each week and by filling up on low-price gas at discount and convenience stores, which now account for three-fourths of gasoline sales.
Wall Street investment bank Goldman Sachs went so far as to predict that a “super-spike may be upon us,” with crude oil prices reaching $135 a barrel by 2008. That would translate to $4.30-a-gallon gas, enough to make Americans “meaningfully reduce consumption,” the analysis said, and is more than $1 above the all-time 1981 record, when gasoline hit $3 in 2005 dollars after two prolonged oil embargoes.
Crude prices did slip below $53 on world markets Monday, down from last week’s record high of $58.28, amidst reports of adequate U.S. inventories and expectations that the Organization of Petroleum Exporting Countries will boost production next month.
Federal Reserve Board Chairman Alan Greenspan’s upbeat take is that, although energy markets are under the greatest stress in a generation, higher prices should spur research and exploration and “unlock new approaches to energy production and use that we can now only scarcely envision.”
Near-term, however, Liz Ann Sonders, chief investment strategist with Charles Schwab, said, “Energy prices are likely to remain high for the foreseeable future, with implications for the (stock) market, the economy and even Fed policy.”
High gas prices apparently haven’t cast a cloud over vacation plans.
More so than in recent months, Americans now expect to have the time and money to take affordable pleasure trips during the summer driving season, according to the Travel Industry Association of America’s quarterly survey. “The good news is that travelers are still relatively positive about the cost of travel,” said association vice president Suzanne Cook, although “rising demand has caused a corresponding increase in travel prices.”
Increased travel demands will push up the price of vacation meals and lodging 5 percent this summer over last, according to AAA’s annual vacation survey. The typical family of four should expect to pay a $247 daily tab – $129 a night for lodging and $118 a day for food – according to AAA spokesman Justin McNaull. Nebraska, at $184, is the food-and-lodging bargain, while Hawaii, at $518, is the costliest destination.
Meantime, the U.S. Energy Information Administration, which predicts high gas prices into 2006, offers these summertime tips for saving gas:
- Don’t speed or drive aggressively, which can cut gas mileage 5 percent in town and 33 percent on the highway. Every five miles an hour you go over 60 equals 10 cents more a gallon for gas.
- A tuned engine can save up to 60 cents a gallon, clean air filters 15 cents and properly inflated tires 5 cents.
On the Net: www.aaa.com
(E-mail Mary Deibel at DeibelM(at)shns.com.)