How high can it get?
Podcast Episode
Kyle Geissler talks with Janesville Gazette business editor Jim Leute about a renewed boost in gas prices.
JANESVILLE — Gas for the 500-plus mile roundtrip between Decatur, Ill., and Madison: $69.
Two tickets to see the Badgers play Penn State at Camp Randall on a Saturday in November a year ago: $92.
Spending the rest of the weekend with your daughter, a UW-Madison student: Priceless.
While that might have been the case last year for John Reynolds and his wife, it wasn’t this past weekend.
Sure, the annual pilgrimage to visit their daughter always is treasured, but the increasing cost of getting to Madison and back isn’t.
This year, the Reynolds paid nearly $30 more to fuel their Ford Expedition for the trip.
“The way the price of gas has gone up is irritating, but we still wouldn’t miss it,” Reynolds said as he fueled up in Janesville on Friday. They were on their way to Madison for a date with their daughter and the Badgers’ date with Michigan.
Reynolds isn’t alone in his irritation. Motorists around the country are wondering why gas prices are rising at a time of year when they’re typically declining.
Janesville’s average price for a gallon of regular unleaded gas on Friday was $3.14, according to AAA. A year ago, it was $2.27.
AAA reported today’s average Janesville price as $3.18 per gallon.
Jeff Heinrich, chairman of the economics department at UW-Whitewater, said it’s unusual for gas prices to be increasing in the fall. They typically decline as winter approaches and motorists curtail their driving.
“It’s also unusual how fast the price of crude oil has gone up,” Heinrich said.
Erin Roth, executive director of the Wisconsin Petroleum Council, said booming economies around the world are pushing up the cost of crude oil. In the last two months, crude is up 60 cents a gallon, while gas prices are up 31 cents.
“The two mirror each other,” Roth said. “Retailers and refiners have been holding their costs, absorbing increases. But there comes a time when you can no longer keep absorbing that.”
Those costs get passed down the line, as motorists and consumers of other products are noticing once again.
Heinrich said gas prices typically are quick to go up when the price of crude goes up, but not as quick to go down when crude drops.
And whether the price of crude oil will drop is pure speculation.
“We just don’t know what will happen with crude,” Roth said. “Pundits are forecasting $120 a barrel crude, but those are the same people making money off trading in it. Others are saying there are no fundamental reasons why crude shouldn’t be trading at $65.”
What that means for gas prices is uncertain, Heinrich and Roth said. What’s likely is that the nation’s motorists need to be prepared for benchmark prices of $3 per gallon.
“It used to be that $2 was that benchmark for people,” Roth said. “But when it went over the $3 mark, we didn’t see the demand decline.
“The next question is what will happen to the demand side if it goes to $4 per gallon.”
Heinrich expects that will happen, but not likely in the next year.
“There are these benchmarks that are psychological for people,” he said. “We’re at that $3 mark again, and I think people are probably realizing that it’s here to stay.”
Gas at $3 per gallon a couple of years ago triggered consumer outrage and calls for lawmakers and policymakers to do something, Heinrich said.
“That’s not happening now,” he said. “I don’t think people like the situation, but I think they understand that it’s not going to go away.”
Sarah Prescott of Janesville is one of those who doesn’t like it.
“I’m just trying to watch my driving patterns, but I still gotta get to work, get the kids here and there,” she said while filling up Friday on Milton Avenue.
“There comes a time when you just don’t have as much money in your pocket (after filling up) to spend on other things.”
Nov 19, 2007 at 3:06 a.m.
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Don't want to offend anyone but my sister-n-law emailed this to me, I thought it was rather funny:
The President wants us to cut the amount of gas we use. The best way to stop using so much gas is to deport 11 million illegal immigrants! That would be 11 million less people using our gas. The price of gas would come down.
Nov 14, 2007 at 11:51 p.m.
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Is it just me or has the economy gone down hill since Bush has been in office? Everything seems all screwed up. I liked it better when Clinton ran things.
Nov 14, 2007 at 8:43 a.m.
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Leg room? Comfort? There are a lot of folks that NEED the room, for children, not legs. For groceries for our family.
Sure, I could put three teenagers and hockey equipment in a 'dinky' car.
Nov 14, 2007 at 7:02 a.m.
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Strcnyne:
Specifically, what rights have been taken away. Try to be specific. Dont emote, try to be absolutely precise in your response.
Nov 13, 2007 at 11:42 p.m.
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drive too fast, big SUV, small cars, what? no wonder the American people are having their rights taken away. It's not only gas prices folks it's everything that is out of control in the U.S. we are getting bent. We are nothing but a bunch of sheep anymore. Whatever happened to protests? This is what happens over generations of teaching children to walk away from the bully..."don't fight back Johnny". Hey we could just sit around and argue with each other or maybe we take our flag back from our government. America wasn't built by cowards.
Nov 13, 2007 at 10:33 p.m.
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You people have got this all wrong. I say burn all the gas/oil up as soon as possible. This will do 2 things. 1. it will get us out of the middle east for good and they can all eat sand for all I care, and 2. it will require the immediate developement and implementation of alternative fuels. Everybody wins.
Nov 13, 2007 at 8:57 p.m.
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FLDPAN
Should US federal gov't solve every problem? Why is it gov'ts responsibility to produce alternative energy solutions. Gov't can and does incentivize private companies to solve problems. This issue is best solved by the free market.
Beleive it or not, Hemp is not the solution to all of the US's problems.
Nov 13, 2007 at 6:54 p.m.
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The government can put satellites in the sky that can see an apple, build planes that hover, clone animals, and split the atom, but they can't figure out a sensible alternative to gasoline? (Maybe hemp?) What about diesel? That is insanely expensive! The trucks delivering our goods have to pay more to run, which leads to higher prices for us on every day items. Why such a high tax? The big government doesn't want people to get rid of their "gas sucking suv's", they get a cut of every dime we spend. The rich and powerful people who could more easily make a difference, don't because they have the money to afford the high prices.
Nov 13, 2007 at 6:21 p.m.
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The people with the tiny,real dinky cars should be the most mad about the gas prices.They are the ones that really care.They are giving up comfort and leg room for better milage and prices are still going up.SHAME on BUBULUS s.u.v's.{i love big s u v's}
Nov 13, 2007 at 3:26 p.m.
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I don't know how many of you are aware of it, but many of the S.U.V.'s on the road today are as energy effecient as some of the medium size cars and vans we see on our highways everyday. Some of our older vehicles on the road today burn more gas than the new ones. It is not just the S.U.V.'s that are the gas hogs. Don't be so judgemental. I agree that if people would just slow down we would save gas and lives. We need to change the speed limit laws and enforce them more strictly. If you can walk to do an errand or have Taco Bell for lunch it would save gas and calories. Try to get all of your errands done when you are out so that you do not need to make extra trips. If a taco bell is close walk to it.
Nov 13, 2007 at 11:54 a.m.
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Momof5, exactly.
We have to have a mini-van. I have three children to drive around...to hockey in the winter, softball in the summer. It's an old van, probably not too good on gas. I cannot afford anything else.
Status symbol? Perhaps if I were driving a Cadillac Escalade. A 10 year old van with rust? Yeah right.
Nov 13, 2007 at 11:22 a.m.
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The only reason gas prices go up is becaause someone WANTS them to go up.The oil refineries are monopolies and you can bet you won't see any job opportunities in that area soon. i got so mad the last time prices went up 20 cents in two days i will now only put $5.00 at a time into my car. I used to keep it full now i keep it 1/4 full. People are going to work to pay for gas to go to work!!!
Nov 12, 2007 at 7:35 p.m.
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not everyone drives an SUV for a status symbol. Some people need a large caspacity vehicle for their family and to haul and tow things.
Nov 12, 2007 at 7:28 p.m.
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gas prices are going to continue to rise irregardless of anything any of us have to say, because it is the oil companies and US the consumer who drive the prices up. We continue to buy cars that are not efficient, and wonder why the gas prices are going up, here's a thought: "Lets all walk to work (if you can). That is the reason gas prices are going so high and they will continue to go that high. But in 100 years when there is no ozone layer, lets all think about GAS prices. oh wait we won't have a thought we will all be dead. Cars and trucks and power plants and all kinds of other things are going to take away our OZONE LAYER, I for one am not concerned about gas prices because, I really dont care how much gas is because I try to conserve has much energy as I can. We only own one care and I feel like I am doing my part, agree or dont agree, I dont care, but that is the truth. It all has to do with SUPPLY and Demand!!!!
Nov 12, 2007 at 7:01 p.m.
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Aw shucks, people need something to complain about I guess. I just consolidate my trips as much as possible & keep to the posted speed. (That drives the city bus drivers crazy when they get behind me!) As it is, my little truck gets around 25 to the gallon in the city.
Nov 12, 2007 at 6:13 p.m.
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I will believe that people are truly distressed by the high cost of gasoline when I see them taking serious steps to conserve. They can start by slowing down. Motorists are typically traveling 10 miles an hour over posted limits on city streets and rural highways. On the Interstate, no one seems to even recognize that there is a speed limit as 80-85mph is the norm and many are going faster than that.
Driving the speed limit would save such drivers hundreds of dollars a year. If you aren't willing to do that, then pay up and shut up.
Nov 12, 2007 at 12:34 p.m.
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Idea:
Ditch the gas hog SUV and get something with better gas milage.
I sure you could cut the travel expense in half.
The only thing you would hve to sacrifice would be your status symbol vehicle. Who knows you may even feel good about not WASTING such a preceiuos commodity.
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