Expect to pay more, but government analysts say the feared surge to $4 a gallon is unlikely in 2011.
Be prepared to see the price at your local pump push towards $4 a gallon by the Independence Day holiday, warns the Department of Energy, in a new fuel forecast.
But the odds favor a less radical run-up, the government predicts, with only a 7% chance we’ll be paying $4 for gas this year. Nonetheless, the DoE’s Energy Information Administration, sees it a certainty that fuel costs will keep climbing from their current level, which is average a bit more than $3 a gallon nationwide.
The EIA says the average price for a barrel of crude oil ran $89 in December 2010, and should push to $93 this year. Considering the figure is already nudging close to $92, it raises the question of whether the government forecast is too conservative. By the end of 2012, the forecast is $99 a barrel, which would still be well short of the record $147 hit in July 2008.
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A steady climb upward would be far more acceptable, according to most economists, than the extreme peaks and valleys seen in recent years – 2008’s high point was followed by a low of $38 a barrel in December of that year.
While a senior Shell official recently warned that prices at the pump could soon be in the $5 range, the Energy Department forecast calls for an average $3.17, across the country, this year, up from $2.78 in 2010. That is expected to climb to $3.29 a gallon in 2012.