$5-a-Gallon Gasoline by 2012, says Ex-Shell President


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.

Former Shell President John Hofmiester told Platts Energy Weekly television that by 2012, Americans could be paying, on average, $5 a gallon for gas, even without a gas tax hike.

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?

Source: Platts Energy Week via CNN

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.

About the Author

A writer and gearhead who loves all things automotive, from hybrids to HEMIs, can be found wrenching or writing- or else, he’s running, because he’s one of those crazy people who gets enjoyment from running insane distances.

  • Oil companies operate with some pretty shady tactics, at times – but I’m not sure it’s fair to say that gasoline hasn’t changed in 100 years. From a tuning perspective, I can tell you that a car will make more power on Shell or Sunoco 93 than it will on Citgo 93, and some of the “discount” gas will cause high-boost cars to throw check-engine lights from misfires.

    I have to believe, also, that companies like Elf and Shell and VP have really been pushing development of racing fuels, at least – or else the products the end-users buy would all be pretty much the same.

  • This is a move to put more money in Shells back pocket and it is criminal.

    Things have been dying for a billion years on this planet and these companies have more access to larger fuel supplies than ever in humane history.

    Of course we need to get off of fossil fuels, but this article is pure fear mongering and price manipulation for profit. They are using the environment to cover criminal activity. The media has become complicate in this manipulation.

    Remember how well our economy was working before this artificial hike in gas prices? People who speculate on the price of oil should be stopped and our government should use our strategic supply of oil to combat this blatant price fixing scheme.

  • The more expensive gasoline is, the better it is for the environment. People will buy more hybrids and small high efficient cars. For a lot of environmentalists, $5/gallon is not coming fast enough!

  • Jim

    I wouldn’t be surprised to see $5 gallon by 2012 given the macro-economic trends you’ve highlighted. We expected this would happen and built a couple of apps to help people better budget for rising gas prices. One is http://www.cost2drive.com which calculates the cost of driving anywhere in the US based on current gas prices and the other is a Facebook app that calculates how much money you’d save driving an electric car to work. You can find it at http://apps.facebook.com/costtodrive

  • I listened to Jon Hofmeister on TV. He seems to be dedicated to one word – MORE. He wants MORE drilling and MORE oil and MORE refining. The one place he didn’t use MORE was in MORE options.

  • $5 per gallon may be a lot in the US, but in Norway, and many other countries in Europe, we pay almost twice that already.
    We haven’t seen prices that low ($5-a-gallon ~ aproximately 7.76 NOK per litre) in at least 10-15 years.

    The average income over here may be higher, but winters are hard, distances between were we need to go are long and public transportation could be a lot better.

  • 5 dollar gas eventually is inevitable and should correspond to about $175/bbl eclipsing the previous high by $25/bbl. Since we are at nearly 100 now and an industry pundit from Big Oil figured $125 by end of first quarter and possible highs by labor day! i’m not sure about 2012, but wouldn’t be surprised if we hit $5/gallon in summer 2011

    Another pundit also pointed out that when oil prices triple (like they have over the last 2 years) there can be a stock market correction. So I guess we’ll see who’s right. I know where I’d put my money though!