April 19, 2006
Paying at the pump has now become even more painful for drivers. Oil prices rose over $72 a barrel today, making a new record high. Economists say there are many reasons why it's so high, but it seems that many people have no idea what those are.
"I'm not really sure. All I know is the last time that this happened they were questioning whether the oil companies were stockpiling," said Cheryl Diggs.
"I do believe politics is involved," said Margaret Bailey.
"Because of Hurricane Katrina last year, I guess that's the only reason it went up, I have no clue," said Elsie Scott.
Elsie Scott is partially right. There's never just one reason why prices jump. Economists like Lee Coppock of University of Virginia say tension overseas from some of the world's largest oil suppliers, Iran and Nigeria.
Add that to the problem with ruined refineries here in the U.S. because of Hurricane Katrina. Mix that with the millions of people who are going to gas up for their summer vacations, and you have a really big problem trying to balance supply with demand.
"That makes it harder for suppliers to adjust whenever there is a change in demand," said Lee Coppock.
According to AAA gas in the city of Charlottesville has gone up by 60 cents in the last year. The average price per gallon is $2.80 and climbing, but how high will it go?
"Just looking at historical numbers there are sometimes where it tends to peak up and spike a little bit and yes these times are different than they were a year ago, but I would be really surprised if it gets even significantly over $3 a gallon," said Lee Coppock.
That's good news for those heading off for the summer driving season.
"I hope it doesn't get that high," said Bailey.
"That may ruin my vacation," said Scott.
Those drivers also said that no matter how much these prices rise, they will still go on that summer vacation. If you are still willing to shell out a few bucks for the car trip, experts offer a few tips: Shop around for the cheapest price, check to make sure your tires are properly inflated, and change the oil and air filters in your car to avoid idling.