High gas price warnings may be somewhat pumped up

Don Ames
May 04, 2018 - 9:46 am
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Energy analysts are warning motorists to beware of approaching painful prices at the pump. But, it appears filling your fuel tank won't be as frightful as the prognosticators predict.

The headlines say 'brace yourself for the highest gas prices since 2014.' And, that may well be true, according to AAA Louisiana spokesman, Don Redman. But, he says that sounds a lot worse than it actually is.

"Considering that, at this time in 2014, we were paying $3.31 a gallon. But, we're not talking about a return to those type of prices."

Redman says we've become a bit spoiled recently.

"We got really used to, the past couple of years, seeing prices well under the 3-dollar mark. In fact, this time last year in Louisiana, we were looking at $2.15 a gallon...the previous year, $2.05 a gallon."  

"Now, we're back up to territory we're more used to which is above the $2.50 range," says Redman. "It's pretty much what we had projected for the Gulf Coast for May to summer."

"Barring any kind of major, significant change in Louisiana, I think we're going to be hovering around the $2.50 to $2.70 range as we get into the peak summer."

And, Redman reminds Louisianians that rising fuel costs and a recovering oil industry are beneficial to them, in the long run.

"For any states that are involved in producing petroleum, it's always a mixed blessing," he says. "I mean, nobody wants to be paying higher prices at the gas pump. But, on the other hand, in terms of tax revenue and in terms of employment, this is great news for Louisiana."  

Redman says the rig count is up more than 130 from last year since the rising price of crude has made it more profitable to start exploring for oil.

After a two-year crash, the price of crude began to recover in 2016, piercing the $60-a-barrel mark early this year. One economist says $60 is like the new $100. Breakeven costs are now as little as $25 per barrel, so energy companies no longer need $100 oil to make lots of money.
 

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