Will gasoline return to higher levels?
Starting to feel the pinch at the pump again?
Gasoline prices have been teasing us lately, spiking toward that infamous $3 mark last weekend, then sliding back just enough to keep us coming back for more.
The average price for regular gasoline jumped between 71 cents and 89 cents a gallon in area counties this month, compared to the same period last year, said Beth Mosher, a spokeswoman for Aurora-based AAA Chicago.
The average cost of a gallon of regular gasoline cost between $2.69 and $2.83, depending on the county, the AAA Chicago's January fuel report is expected to say on Monday.
"It all comes back to the price of (crude) oil," Mosher said. "It's over $80 a barrel now, a lot higher than where it should be."
But it's definitely not as high as in July 2008 when a gallon of regular gasoline hit a record $4.25 in Illinois. That was at a time when more people still were employed, made their full salaries, and didn't see the economy as a threat to their lifestyles.
So don't expect any relief any time soon.
"We don't see these prices turning around until oil comes back down," Mosher said.
The Springfield-based Illinois Petroleum Council said other factors also are at play. Besides the price of crude oil, worldwide demand is surging, said Council Executive Director David Sykuta.
"Our economy and other economies around the world are all recovering and as they recover, they use more energy," Sykuta said. "Ours, Germany's, France's economy. We can't recover without using more energy."
Sykuta also said the dropping value of the U.S. dollar overseas has a major impact.
"The dollar is at a historic low level, not worth much more than Monopoly money right now," Sykuta said.
That's when investors start jumping into commodities, including oil.
"As the dollar goes down, investors worry about inflation and bid up hard commodities. It's demand and speculation," he said.
Couple those issues with taxes, and you have more cash flowing out of your pocket and into the pump. Illinois is among nine states that pile on state and local taxes by percentage on each gallon of gasoline. So when the price of gasoline increases, so does the cents-per-gallon tax cost.
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