Gas prices spiral up as experts predict higher pump costs through mid-January

jrich@bradenton.comDecember 28, 2012 

MANATEE -- Santa didn't deliver any relief from volatile gas prices this holiday season. After weeks of decline, prices have started inching back up.

In the Bradenton-Sarasota metro area, the average price for a gallon of unleaded gas was $3.31 Thursday, up 3 cents from Wednesday and 7 cents from a week ago.

And experts say don't expect any relief for a while.

"We don't expect retreat until mid-January," said AAA spokesperson Mark Jenkins.

Political and economic issues like the pending fiscal cliff, increased demand for heating oil and the weakness of the U.S. dollar all have impacted gas prices, Jenkins said.

"There is uncertainty about what is going to happen," he said. "It's like a roller coaster ride."

For the past two years, the scenario has been the same -- gas prices improve in December when the stock market traditionally rallies and economic growth is predicted. But around Christmas with increased demand placed by holiday travel and political issues unsettled, prices rise.

"Gas prices are doing exactly what was expected, closing out the year on an upswing," said Jessica Brady, also with AAA.

Florida is seeing higher averages than national numbers. The average price for a gallon of unleaded in Florida Thursday was $3.31, compared to $3.24 nationally.

The average price in 2012 nationally is a record breaker -- $3.61 for a gallon of regular, 10 cents more than the annual average in 2011.

The West Palm Beach-Boca Raton metro area currently has the highest prices in the state at $3.45 per gallon.

But at least one fuel analyst expects good things for 2013 when it comes to gas prices.

Phil Flynn with Price Futures Group in Chicago thinks prices in the new year will rival the low prices of 2008 when the economy tanked and motorists sometimes were paying below $2.50 for a gallon.

"We are seeing a long-term demand shift in gasoline," Flynn said.

Alternative fuels along with more fuel-efficient vehicles are part of the reason.

One way to guarantee low prices is if a fiscal cliff isn't diverted and the economy worsens.

Both Flynn and Jenkins said gas prices will drop significantly.

"If we go over that fiscal cliff, there will be lower demand and lower prices," Flynn said.

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