Gas may top $4 a gallonGrand Forks gas stations were charging an average of $3.82 on Sunday, according to the AAA’s Daily Fuel Gauge Report. That’s up 21 cents from a week ago and 90 cents compared to last April.
Gas prices are on the rise across the country, and the price for a gallon of regular unleaded fuel is on track to climb above $4 — or even $5 —this summer.
Grand Forks gas stations were charging an average of $3.82 on Sunday, according to the AAA’s Daily Fuel Gauge Report. That’s up 21 cents from a week ago and 90 cents compared with last April.
On average, North Dakotans were paying $3.75 a gallon Monday while Minnesotans paid $3.85, according to GasBuddy.com.
Grand Forks residents have paid more for fuel in the not-so-distant past — as much as $4.04 on June 12, 2008 as prices reached record levels across the country. But the current national average price suggests those records could be topped as the summer travel season begins.
According to the Energy Information Administration, fuel prices peaked at an average of $4.05 in the summer of 2008.
By early April of that year, prices had climbed to $3.30 — about 49 cents cheaper than the national average of $3.79 on Monday.
But North Dakota AAA spokesman Gene LaDoucer said high prices in 2008 were caused by several things that aren’t happening this year.
“For one, unemployment is so much higher now than at that point in 2008,” he said. “Back then, we had a great deal of issues with supply meeting demand. Right now, we’re just dealing with the high price of crude oil.”
Lower demand, lower prices?
Crude oil prices started to retreat from a 30-month high Monday, falling 1.1 percent after the International Monetary Fund warned that high prices could pose a risk to the global economy. Prices also dropped after Libyan leader Moammar Gadhafi appeared to accept a cease-fire plan with rebel forces.
Another factor that could keep gas prices down is lower demand as Americans cut back on driving.
Drivers bought about 2.4 million fewer gallons for the week of April 1, a 3.6 percent drop from last year, according to MasterCard SpendingPulse, which tracks the volume of gas sold at 140,000 service stations nationwide.
For five weeks in a row, Americans have bought less gas than they did a year ago — the biggest cutback since snowstorms in December forced people to stay home.
Before the decline, demand was increasing for two months. Some analysts had expected the trend to continue because the economic recovery was picking up, adding 216,000 jobs in March.
Instead, about 70 percent of the nation’s major gas station chains say sales have fallen, according to a March survey by the Oil Price Information Service. More than half reported a drop of 3 percent or more — the sharpest since gas soared past $4 a gallon in the summer of 2008.
LaDoucer said gas prices could now be reaching their peak level for the summer driving season, and there’s a chance prices will soon start to fall.
“The fact that we’re starting to see demand fall I think has investors starting to reconsider the elevated price of crude oil at this point,” LaDoucer said. “There’s no real reason as far as demand is concerned that prices should be this high, and at anytime we might expect a correction.”
The Associated Press contributed to this report. Reach Johnson at (701) 780-1105; (800) 477-6572, ext. 105; or send e-mail to firstname.lastname@example.org.