Gas prices expected to increase to $3.70 a gallon; local residents worried

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By Tony Briscoe
Entirely East Lansing staff writer

Prices at the pump will continue to rise over the spring and summer according to the U.S. Department of Energy, with the national average estimated at $3.70 a gallon ($102 a barrel), which has some East Lansing residents worried.

“These gas prices really dig into peoples’ finances,” said Matt Jewell, East Lansing resident and MSU sophomore. “It can really be a problem especially for college students like (me) that already committ so much to education.”

Government analysts increased their predictions on oil prices as a result of the conflict in Libya, the African nation with the largest proven oil wells. The monthly Short-Term Energy Outlook, which was posted March 8, reports a 50-cent rise, or $9 per barrel, in gas prices.

The national average for regular gasoline was $3.548 on Sunday according to AAA’s Daily Fuel Gauge Report, but prices differ significantly by region.

The average price for unleaded fuel is as follows by state: $3.563 in Florida, $3.908 in California, $3.408 in Texas, $3.422 in Michigan and $3.748 in New York.

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The DOE report on the spring and summer gas increases says, however, there is “significant uncertainty surrounding the forecast” and there is a 25 percent chance that prices could soar over $4 a gallon this summer.

According to the U.S. Energy Information Administration, from Feb. 28 to Mar. 7 alone, regular gas prices have risen 13.7 cents while diesel fuel increased 15.5 percent.

“It certaintly eats into a budget” said MSU economics professor Christian Ahlin, Ph.D. On average, it’s 20 to 30 percent of someone’s budget–ballpark. So, it’s going to have a marginal impact for sure.”

Regular gas has increased 76.9 percent from a year ago. Diesel, on the other hand, has increased 96.7 percent over the course of a year.

The region hit hardest by regular gas hikes is the Midwest, who has suffered a 79.2 percent increase. Prices of diesel fuel on the West Coast have been the largest in the nation, rising 93.9 percent in a year.

In the wake of oil prices increasing at a rate of two cents a day, speculation has surrounded tapping U.S. oil wells, which has been done twice in history—during the first Gulf War and after Hurricane Katrina.

“It all goes back to the price of oil. In principle (tapping U.S. oil reserves) depends on how are in the reserves,” said Ahlin. “I think they would be slow to tap into these resources.”

Ahlin said that if consumer disposible income doesn’t dip too much from gas purchases, there will most likley be more hybrid and fuel efficient vehicles on the road.

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