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Gas at $4 a gallon?

January 4, 2012 - Bill Speer
As Iran threatens to disrupt the flow of oil through the Middle East, President Obama debates the future of oil reserves in the United States and citizens ponder what all this means to their wallet, comes this cheery economic news from our friends at Brace yourself for $4 a gallon gas.

Over the years I have found this website to be the best, and informative, on trends and alerts concerning gasoline issues. Thus, when they issue a press release like the one here, I pay attention. Here is what they have to say on the issue, dated Jan. 3, 2012:

Michigan, MI (Jan. 3) - The U.S. average price of gasoline today, $3.26/g, has declined significantly in recent months but still remains 21.3 cents per gallon higher than the U.S. average price recorded last year at this time.

"As 2011 has come to a close, that’s cause for concern," says Gregg Laskoski, Senior Petroleum Analyst for "Why? For the past seven years, the average price movement from the beginning of the year to the peak price posted during the year has been $0.93 cents per gallon, and as high as $1.31/gallon."

"Last year was actually a good snapshot of what we’ve seen for the past seven years. 2010 ended with the national average at $3.05 and we saw the annual spring 2011 climb push the national average 91 cents higher to its peak level as early as May 11 when it reached $3.96 per gallon," Laskoski said.

Michigan average "start price" to peak retail gasoline prices:

2007: Start Price: $2.21/g on 1/1/2007 Peak Price: $3.57/g on 5/23/2007 Difference: 135.8 cents per gallon

2008: Start Price: $3.08/g on 1/1/2008 Peak Price: $4.21/g on 7/16/2008 Difference: 112.7 cents per gallon

2009: Start Price: $1.71/g on 1/1/2009 Peak Price: $2.94/g on 6/5/2009 Difference: 122.7 cents per gallon

2010: Start Price: $2.67/g on 1/1/2010 Peak Price: $3.16/g on 12/28/2010 Difference: 48.9 cents per gallon

2011: Start Price: $3.12/g on 1/1/2011 Peak Price: $4.25/g on 5/3/2011 Difference: 113.0 cents per gallon

"In three of the last seven years, the spread between the yearly starting price and the peak exceeded $1 per gallon and only once in the past seven years was the spread below .82 cents per gallon. And, while we typically anticipate "peak" prices to occur in the midst of the summer driving season, sometimes the peak can even come after summer has concluded, as was the case nationally during 2006 and 2009. While past performance is no indication of future prices, if the national average doesn’t move closer toward or under $3 per gallon by the year’s end, we could be paying over $4/gal next spring," said Patrick DeHaan, another Petroleum Analyst with GasBuddy.


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