With the national gas price average ending March at $3.90 a gallon, many auto industry observers are predicting that prices will only continue to go higher.
Those who track such numbers say that this year’s increase is steeper than the normal summer inflation. Some say that at the current rate, we should not be surprised if a gallon of gas reaches $6 sometime this summer.
Despite the bad news, at least one person says that high gas prices appear to be more painful than they actually are. Talking about this, IHS chief economist Nariman Behravesh said, “Only 3 percent of consumer budgets go to gasoline. That’s tiny. But here’s the psychological part of it: They’re seeing the prices every time they go to the pump.” That percentage is, at least, comforting. In contrast, auto loans with bad credit may be more than 10-12% of a person’s monthly budget.
Observers say that limited spare worldwide capacity and real and possible supply disruptions are the main causes for this spring’s rising prices.