Price of gasoline in the U.S. could reach $5, says former president of Shell Oil

Article by Christian A., on December 29, 2010

By 2012, the price of a gallon of gasoline in the U.S. could reach $5, according to John Hofmeister, the former president of Shell Oil, in an interview with Platt's Energy Week television. Hofmeister forecasted that gasoline prices will go up as the global demand for oil increases.

He said that the worst outcome will take place in the next two years and that it will signal the start of higher gasoline prices in 2012. But Tom Kloza, chief oil analyst with Oil Price Information Service, disagrees.

He believes that within the next decade, gasoline prices will hit the $5 a gallon mark in the next decade, but not by 2012. He pointed out that the demand is “still sluggish enough” in several of the mature economies. A steady increase has been observed in gasoline prices.

Last week, gas prices crossed the $3 mark for the first time since October 2008. AAA figures show that prices are higher by 4% from a month ago and 16% from the $2.585 average a year ago.

According to a study from the Oil Price Information Service, drivers will spend $305 on gasoline in December. The study also determined that fuel prices are up 13.6% from last December and 76% higher from December 2008. [via CNNMoney]

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