DETROIT – The average unleaded regular gasoline price today is $3.89. That's the highest March 5 price ever and it's uncomfortable as always.
An historic look at AAA's listings of March 5 metro Detroit unleaded regular prices shows you just how painful today's price is:
Year Unleaded Reg. Price Amt. Less
2012 $3.89
2011 $3.52 $ .37
2010 $2.66 $1.23
2009 $1.96 $1.93
2008 $3.06 $ .83
2007 $2.50 $1.39
2006 $2.37 $1.52
2005 $1.99 $1.90
2004 $1.69 $2.20
2003 $1.72 $2.17
2002 $1.15 $2.74
The average price here over the last decade is $2.65 a gallon!
You're wondering what's going on this time?
Well it's not gasoline supply believe it or not.
We are awash in gasoline, so much so we as a nation are now exporting gasoline because our demand is at generational lows. There is so much gasoline in the United States, refineries are closing on the east coast.
Kevin Lindemer, the highly respected oil industry analyst, says it has everything to do with politics. Unlike the previous gas spikes, in 2008 and 2009 when supply did matter, he says today the WTI crude price [which closed today @ just under $107] is directly tied to gasoline prices. This means speculation has taken over. The futures traders in the oil pits on the New York Mercantile Exchange have bid up both gasoline and oil as a result of the tensions in Iran.
Today's meeting between President Barack Obama and Israeli Prime Minister Benjamin Netanyahu was vital in where this situation goes. The president did some uncharacteristic saber rattling and said he backed Israel whole heartedly. Still his administration wants more time to see of crushing sanctions can convince the Iranians going nuclear is a bad option.
Lindemer says if tensions ease we are likely to see gasoline prices fall relatively quickly. If not, we are likely to see these prices around $4 a gallon for a while. But he told me he does not see $5 a gallon gasoline unless war breaks out in the Middle East. Then, he said we will have a lot more to worry about than $5 a gallon gasoline.
There are many conspiracy theories, much clamoring for attacking the oil companies, much wrong headed blame placed on the local gasoline station owner. There is no immediate solution, sadly.
More than anything, we all feel a lot of pain at the pump.
We find ourselves in the place we always do in these instances, scrimping, cutting back the family budget, belt tightening and otherwise coping with whatever happens at your local gasoline station. Hang on tight! We're in for another bumpy ride this spring and summer.