Middle East unrest means soaring gas prices

Friday, February 25, 2011

The political unrest in the Middle East is sending gas prices climbing at your neighborhood service station.

Nationally, a gallon of regular gas is just over $3.28. In Philadelphia, it's fractionally above the national average. New Jersey is less costly, as usual, at $3.11 per gallon, and Delaware is rounded up to $3.20.

And the higher prices are impacting people from all walks of life across the tri-state area.

Action News caught up with college student Dan Martin today, who was musing on the impact on his commute if prices continue to climb toward $4 a gallon.

"My mom works at school, so I could get a ride with her," he said. "It would definitely affect me if it goes up to 4-something a gallon."

Douglas Robinson of Ardmore, Pa. also has a plan. "I probably will bike more once the weather breaks because I am a biker," he said. "Also I would probably downsize from my SUV to a 4-cylinder vehicle."

A gallon of gas cost about $2.70 after Labor Day. Prices climbed all winter, but spiked up a couple weeks ago with concerns over the Middle East.

All this has led to speculation of $5, even $6 a gallon gasoline. So far that is beyond mainstream thinking.

"We are not going there," said Rick Remington of AAA Mid-Atlantic. "The analysts we follow had been projecting $3.50, $3.75 a gallon around Memorial Day. They are now moving that up to the end of April. But we are not pushing the $5 and $6 scenarios."

At those prices, Remington says, drivers would scale back demand. But what about supply if the current political unrest spreads?

"The wild cards in this are Iran and Saudi Arabia, which are major oil producers," said Remington. "If the turmoil spreads to those countries, then all bets are off."

If oil prices stay just where they are but you haven't flown since last summer, experts say, prepare for some sticker shock the next time you buy a plane ticket.

Airlines have already hiked domestic airfares $25 to $60 dollars this year, and there is talk of summer surcharges. But travel consultant Franni Segal of Monarch Travel doesn't think that will scare away vacation travelers at this point.

"They are going to be in shock but still going to go," she said, "because if you think about the price of the gas rising that's not a great alternative for them."

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philadelphia, pennsylvania, energy, gas prices, economy, new jersey, delaware, middle east, local/state, john rawlins
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