Gas price hike balloons spring break budgets
Gas prices went up as much as 40 cents per gallon in recent days without warning.
Spring break usually means higher gas costs, but something else is happening that could boost prices for the long term.
"Astronomical," said driver Shemil Tucker at the pump Tuesday.
"It's always concerning. I'm not sure what we're going to do about it," said another driver.
GasBuddy.com reported an average of $3.89 per gallon for regular unleaded around Indianapolis. The high price is just a nickel under $4, but crude prices are down.
So why has gasoline gone up 50 cents in just over a week?
Spring break travel season, for one. Prices usually go up. Plus, some refineries are cutting back on making gas while they repair equipment and "the EPA has put in new requirements for renewable energy," said University of Indianapolis professor Dr. Matthew Will.
If refineries don't make a certain amount of gasoline from renewables like corn, they must pay a fee or buy a credit to keep their production up.
"Those credits used to cost a few cents a gallon now they cost a dollar per gallon," Will said. "As a result, companies either have to export, reduce production, or pass the cost along to the consumer. And most likely we're going to see that cost passed along."
The UIndy expert says Indianapolis has little gas competition, with just two companies supplying most of the gas. That's why you don't see a lot of difference between gas prices around the metropolitan area. The signs out front may be different, but Marathon and BP are the big suppliers, Will says.
What is the impact of $3.95 gas on spring break? Using the AAA fuel calculator and assuming we were driving an SUV, we found a trip to St. Louis would cost $148 - that's $17 more than a week ago. A drive to Mobile, Alabama would cost $444 in gas, up $49. Jacksonville and Boston both cash in at $60 higher than last year, at $533 for the roundtrip.
"A lot of the shopping I planned to do for the spring, we're going to have to cut back a little bit and save up for the gas," Tucker said.