Energy crisis jitters hit as gas prices approach record high
Rumors of an energy crisis are beginning to become more than mere whispers as gas prices inch closer to a record high. The national average cost of a gallon of gasoline has been steadily increasing for weeks, putting pressure on households and industries. The price hike shows no sign of slowing down.
Price of gasoline quickly rises 20 cents
The nationwide average cost of a gallon of gasoline has risen by nearly 20 cents in the past few weeks. A Lundberg survey put the cost of a gallon of gas at an average of $3.76 as of April 8, according to Reuters, up from $3.57 on March 18. The price of gas has increased by nearly $1 in the past year. The current record for gas prices in the United States was set in July of 2008, at $4.11 per gallon. Currently, large cities in the U.S. are averaging more than that. California, according to CBS, has already reached a statewide average of $4.14 per gallon as of April 8.
Gas prices could clip wings of airlines
The air travel industry is set to withstand a battering as the cost of jet fuel is increasing, according to CNN. Jet fuel costs go up with the price of petroleum, which recently climbed to $112 per barrel. The record was in 2008, when the cost of oil hit $150 per barrel and airlines took an enormous hit to their bottom lines. Shares of major airlines have begun to fall on stock markets because of the increasing cost of oil. On April 8, the stock price of Delta fell by 4 percent, Jet Blue fell by 5 percent and UnitedContinental stock fell by almost 7 percent. Costs of oil and gasoline are not likely to decrease, as analysts do not believe that unrest in the Middle East is subsiding. Airfare increases have already been noted this year, and there are likely to be more as the cost of fuel keeps going up.
Consumers cutting back
There are already signs of consumers not wanting to grin and bear greater costs of a gallon of gas. Credit card companies, according to Daily Finance, have noted falling gas sales for the past five weeks, and 70 percent of the nation’s gas station chains have noticed the same. People are beginning to cut back on the amount of gas they purchase and trade in less fuel efficient vehicles for economically friendly gas sippers. Sales of hybrids, according to USA Today, have increased by 37 percent since the start of the year. The increase in price is leading to lower demand, as fewer people are willing to pay the increased cost of fuel.