Local energy expert: Gasoline prices 'definitely going up'

By R.a. Monti

Published: Wednesday, July 18, 2012, 8:30?p.m.
Updated 5 hours ago

Gas prices have bottomed out and should continue to rise for the rest of the year, according to a local expert.

Kent Moors, a political science professor at Duquesne University who heads The Energy Policy Research Group, said there's really no telling how high gas prices will rise through the next five months.

"Where they're going no one knows for sure," he said. "But they're definitely going to go up."

The Energy Policy Research Group is a research unit that provides data and analysis about current energy policy.

"We've added between 10 and 12 cents on the gallon in the last five days," Moors said.

Gasoline prices averaged about $3.43 per gallon in Western Pennsylvania on Wednesday, according to AAA. That's about three cents higher than the national average.

Moors said the usual factors -- such as tension in the Middle East and more people driving during the summer months -- are contributing to the rising prices.

"There was a scare about the state of the economy last month, which caused crude oil to go down by 20 percent and the price of gas to go down 25 percent," he said. "Keep an eye on the Strait of Hormuz.

"If Iran takes measures to prevent oil from being moved through there, prices will really reflect that," he said. "About 20 percent of the world's oil travels through there."

A barrel of oil cost slightly less than $90 on Wednesday.

Gas costs more here

Moors said consumers already should be used to the fact that a gallon of gas costs more in Western Pennsylvania than it does in most other places.

"State taxes are much higher here," he said. "That's why you see such a disparity over prices across the border in Ohio.

"There's also the factor that there is no direct oil line to Western Pennsylvania.

"Western Pennsylvania has the longest distance between refineries in the country."

Moors said Chicago, because of special gasoline blends Illinois state law requires them to use, has the highest average price in the country. An average gallon of gas cost $3.82 in the Chicago area on Wednesday.

Price fluctuations

Folks often gripe that when oil prices go down it takes gas prices longer to reflect that than it does when prices go up. That's something that Moors says is a reality.

"As the price of crude oil goes down, refineries have a higher margin for profit," he said. "It takes awhile for the market to level that out.

"When the price of oil goes up, those margins are closed so the price is quickly raised."

Moors said this cat-and-mouse game will continue until the United States becomes less dependent on oil.

"You have five companies that control 50 percent of this country's oil consumption," he said. "It's a hostage audience; we're dependent on oil.

"Until we decide to do different sorts of things, it will remain that way."

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