Last week, gas prices hit $3 a gallon nationwide, and $4 a gallon gas seems inevitable this summer. Now the former president of Shell Gasoline says that by the summer of 2012, gas could cost $5 a gallon. Yikes.
Why so high, so soon? While demand for crude is “sluggish” currently, India and China are both poised to become bigger buyers of petroleum in the next two years. China alone bought more cars than the U.S. in 2009 and could do it again in 2010. While India sold far fewer cars (just over 2.1 million) in 2009, that is a 10% increase over 2008. All these new cars require gasoline still, and while America still consumes the most petrol, India and China combined have something like 40% of the world’s population, and pretty soon we’re all going to be competing for the same oil reserves.
There is another factor at work here too; Americans are using less gas. Even so, oil companies would probably like to continue making record profits, so to make the same money selling less of the same product, the price has to go up. I wouldn’t put it past them, and since we’re a free market, they can sell their product at any price they think people will pay. I don’t have a problem with capitalism, but it is funny how gasoline is the one product that has not made any real meaningful changes in over 100 years, yet we continue to pay more and more money for it…
Think we’ll see $5 a gallon gas by the summer of 2012?
Chris DeMorro is a writer and gearhead who loves all things automotive, from hybrids to Hemis. You can follow his slow descent into madness at Sublime Burnout.