Saturday, February 18, 2012

Gasoline Price Level


NEW YORK (AP) — Gasoline prices have never been higher this time of the year. 
At $3.53 a gallon, prices are already up 25 cents since Jan. 1. And experts say they could reach a record $4.25 a gallon by late April.
"You're going to see a lot more staycations this year," says Michael Lynch, president of Strategic Energy & Economic Research. "When the price gets anywhere near $4, you really see people react."
Read it at The Huffington Post
Gas Prices Are Highest Ever For This Time Of Year
by Associated Press

Increase in fuel cost is chiefly thought of as inflationary, but prices increases act very directly on effective demand like a tax increase.

Even more concerning, industry experts are predicting $5.00 gasoline this summer based on the price level in winter. 

The result would be immediately deflationary rather than inflationary as effective demand for discretionary goods was hit hard. Moreover, consumer confidence would take a serious hit, too.

And the situation in MENA is having an impact, too, both the Arab Spring revolutions, the Iran embargo, and the threat of war with Iran.

1 comment:

Matt Franko said...

How can moron Obama think taking $5 gas into the election is going to work for him?