Gas prices are on the rise, as they are just about every year heading into warmer weather. The question becomes, how high will they go and how will it affect consumer purchasing in other areas?
The average price for a gallon of gas has hit $2.75 and is at a high for the year so far. Many believe that gas will eventually top $3 a gallon this summer.
A number of factors are combining to drive up the price consumers pay at the pump, including an improving economy, a weak dollar, and geopolitical factors such as armed conflicts in oil-producing nations.
Tom Kloza, chief oil analyst at the Oil Price Information Service, told The New York Times that consumers are paying over $1 billion a day to put gas in the tanks of their automobiles. That figure, he estimates, is about $250 million more than at this time last year.
"That's a drag on the economy," Mr. Kloza said.
Recent trading on the oil market has seen the price of a barrel go above $80.
"It remains to be seen whether we can hold $80, since we've failed to hold it five times in the past five months," Addison Armstrong, senior director for market research at Tradition Energy, told the Times. "Given the low level of demand, gasoline inventories certainly aren't tightening."
Discussion Questions: Are you concerned that gas prices will rise to the point this summer that it will affect consumer purchases at retail? How will rising fuel prices affect retail operations?