Gas prices seem high now but the worst is yet to come, at least according to one industry insider in Wyoming.
A Laramie-based gasoline distributor said the likelihood of seeing gas prices over $6 per gallon this summer is a certainty.
It’s not that far off now. Tim Mandese, who tracks gas prices for Cowboy State Daily, reported on Friday that one gas station in Jackson is now charging $5.29 per gallon while the average in the state is $4.41.
Supply And Demand
Mintu Pandher, owner of Laramie-headquartered Akal Energy, said gas prices will continue to increase because the demand is there and supply is tight. And as long as these conditions remain, the prices aren’t going down.
“We’re not seeing any demand destruction yet,” Pandher told Cowboy State Daily, referring to an economic phrase which means that high prices will eventually cause demand to drop.
But Pandher said that phenomenon isn’t happening, likely because of the COVID pandemic.
“People didn’t drive for two years so I think there’s a feeling like they have a right to drive now, regardless of price. They’re driving despite the gas prices,” he said.
“Exporting Like Crazy”
Pandher said the difference this year compared to 2008, when gas prices also soared, is the U.S. imported more oil than it does now. Plus, U.S. companies are exporting a lot more as well.
“We are exporting like crazy,” he said, mentioning that the U.S. is now exporting more than 10 million barrels per day now compared to 8 million barrels a day a year ago.
“East coast oil companies would much rather sell gas and diesel to Europe than local markets because our local consumers feel like gas should cost $1.99 or $2.99 a gallon,” he said. “They can make more money overseas.”
Wyoming is certainly not alone in feeling the pinch although things are much worse in some other states.
$9.50 Per Gallon
One gas station in California on Friday recorded $9.50 per gallon in Mendocino, along the northern California coast.
Although it won’t get that high in Wyoming, Pandher said but the $6 range can be expected.
“Gasoline is a commodity,” he said. “The more demand for it, the higher the price.”
Pandher said it’s easy to point the finger at oil companies and blame them but he said there’s no real bad guy.
It’s a global economy and oil companies are merely trying to make money for their investors, he said.
“These companies are publicly traded,” he said. “So it’s their obligation to make every single dollar and a penny for the investors.
“They feel like they got hurt the last few years and they aren’t going to lose money,” he said.
So when do things get back to normal?
“When the demand drops. It’s up to the consumer,” he said.