It seems that every time you pass a gas station the price of gas has gone up, even if you jut passed it an hour ago. At this time, retail gas prices are at the highest ever for this time period. They should not be because there is declining demand and ample supply. The reason gasoline prices are increasing is because of the Persian Gulf tension, which is keeping the prices for crude oil almost one hundred dollars for each barrel for January.
Until it is clearer as to what is going to take place in the Persian Gulf, the oil prices will most likely stay at that level. The tension is due to Iran’s threat to shut down the Strait of Hormuz. The United States, along with other countries, imposes any other sanctions on Iran’s nuclear program this will happen. At this time, in the United States, imports from Iran are banned. Iran does supply two point two million barrels a day, mainly to Europe and Asia, but also other parts of the world. Besides the Iranian situation, the debt crisis in Europe, and how the global economy will be affected, if at all, adds to the high prices.
On average, the price of a gallon of gasoline on Friday was three dollars and thirty-eight cents, which is approximately seventeen cents higher than in December. It is approximately twenty-seven cents more than last year at this time. The highest prices could be found in areas of the Northeast, California, and Illinois. The lowest prices could be found in areas of the Midwest and the Rocky Mountain area. Depending on how the situation plays out in the Persian Gulf gasoline prices could go up or down twenty-five to fifty cents a gallon.