Gas prices rise in Midwest

With spring break on the horizon, many students are gearing up to hit the road for their week off.

But they’ll likely be paying more at the pump, as gas prices in Illinois have risen an average of 5.4 cents per gallon this week compared to a nationwide increase of 3.8 cents per gallon, according to Gasbuddy.com.

Alhough prices in Champaign are slightly lower than the national average, the state as a whole averaged $2.89 on Wednesday, compared to the national average of $2.79.

Patrick DeHaan, senior petroleum analyst for Gasbuddy.com, said the Midwest saw a surplus in the supply of gas, giving some people a false sense of a decrease in its prices.

“The unemployment numbers affect demand, so demand was lower than it’s been in years past the last few months, and so that’s exactly why we’ve seen an increase in supply,” DeHaan said.

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He also attributed an increased ownership of fuel-efficient vehicles to the decrease in fuel demand.

Jason Toews, co-founder of Gasbuddy.com, said March is a typical month for gas prices to spike.

“There’s a switch over from winter fuel to summer fuel right now,” he said.

Toews said although gas prices have been lower throughout the past year and a half, people should expect them to rise again in the near future.

“Gas prices in summer of 2008 were over four dollars in most parts of the country. Then the economic crisis hit,” he said. “Crude oil, essentially over the course of four months went from $150 per barrel down to about $32 per barrel. That really depressed the market, the market for gasoline was artificially low because of that.”

Stephen Parente, associate professor of macroeconomics, said many economists believe that the economy is slowly coming out of the recession, but he cannot predict when it will be fully recovered.

“You’ve got the industrialization of China and India where huge amounts of the world’s population live and these people are going to want cars and that’s going to drive up the prices of gas and oil,” Parente said. “We’re running down our stocks in the ground of oil and gasoline, and supply is not growing but demand is.”

Parente said it makes sense that gas prices went down after the economy crashed because demand decreased, but there was still a supply.

Toews added that when the prices rose to above the $4 level, there was a large increase in use of public transportation around the country.

“Once the economy picks up again, we’re going to see gas prices continue to rise, and it’s not out of the question to have five or six dollar per gallon gas in three years,” he said.

DeHaan said another factor contributing to increases in the price of gas in the future will be intense competition with China to obtain the finite resource.

“To get at crude oil now, it’s a lot more expensive to extract it from the ground,” Toews said. “It’s not like the Jeffersons where they shot their gun in the ground and the oil started bubbling up.”

Toews said he thinks it will take more than a 5.4 cent increase to have a large effect on demand, which is why gas prices slowly rise over time as opposed to suddenly rising a full dollar overnight.

Kayleigh Johnson, senior in Nursing, said she is driving to Panama City Beach for spring break, and although gas prices may have increased, driving will still be a cheaper option than flying.

She said she used to notice the rises in gas price, but because it has fluctuated so much over the past few years, she hardly notices anymore.