Four Dollar Gas Has Arrived

Every motorist’s nightmare has come true:  gas prices have topped $4 per gallon in Hawaii.

Data on the American Automobile Association website shows that regular fuel in the Aloha State is fetching $4.016 per gallon.  Other states are not far behind Hawaii.  California drivers are paying $3.962 while gas in Alaska is fetching $3.922.  Nationally, the price for a gallon of regular has reached $3.556, up from $2.790 a year earlier.

These prices are hardly shocking.  The turmoil in the Middle East has pushed oil above $100, a price so high that some are calling on President Obama to tap the Strategic Petroleum Reserve  to drive down the price of gasoline.  The USA Today, for one, thinks that is a bad idea arguing it “would make the nation more vulnerable to a real energy crisis.”

The impact of high gas prices will be far-reaching on the U.S. economy.  Americans will have less discretionary income, hurting sales of some retailers, because they need to spend more keeping their gas tanks filled.  Resort operators will be affected because Americans will be less willing to travel long distances to go on vacation.  Home sales will be hurt in the outer suburbs as people will be less willing to commute to jobs in cities from far distance.

Unfortunately, motorists are not going to get a break anytime.  In December,  Former  Shell Oil Co. President John Hoffmeister predicted that Americans would be paying $5 a gallon by 2012.    With the current uncertainty in the Middle East, that prediction may have been optimistic.

–Jonathan Berr