Economist predicts gas prices will drop in early summer
“We have to recognize that this is just not a Memphis market. This is not a Tennessee market. This is a global market,” said 901 Economics President John Gnuschke.
MEMPHIS, Tenn. – Gas prices have reached a record high in the United States. This is the highest ever reached in our history.
If you don’t feel it in your pockets yet, you will.
Here’s why we’re seeing these price spikes and here’s when they’re expected to come back down.
“There’s a saying in economics that free food doesn’t exist,” said 901 Economics president John Gnuschke.
Gas certainly does the trick. In the Mid-South, we jumped about 10 cents in one day.
Gnuschke said the rise had everything to do with the Russian-Ukrainian conflict.
“We want to deal with Ukraine and the Russian situation there. And yet we don’t want to drive up the price of oil and gas at the pump, but you can’t have both,” Gnuschke said.
That’s why we see the increase at the pump.
“When we import oil, we only import a very small percentage of our total consumption from Russia. So it will only have a very small impact in the United States, where it would have the most impact, c is in Europe,” Gnuschke said.
Our international businesses such as FedEx and AutoZone are also heavily impacted. If we import so little, why does it affect our pockets so much?
“When we sleep. People in other parts of the world use gas. So we have to recognize that this is just not a Memphis market. This is not a Tennessee market. It’s a global market,” Gnuschke said.
Here is another way of looking at things.
“If Exxon can sell gasoline for $6 a gallon in Europe and can sell it for $3.50 in the United States, where do you think they’re going to sell it,” Dr. Gnuschke asked.
“Prices are high, it’s a good time to sell it,” Dr Gnuschke said. “We need to expand the use of oil from places other than Russia… The oil companies are very, very smart. They produce as much oil as possible when prices are high. So they are pumping right now.
As oil companies try to meet global demand, what can we do to save at home?
“Whenever possible, consumers should use public transport. But that’s not a very good option in Memphis,” Gnuschke said. “What you need to do is save on how often you drive, how far you go and how much gas you waste.”
This means that consumers will have to budget when it comes to gasoline.
“It’s going to hurt our wallets, both every week when we fill up and every month when we have to pay our bills,” Gnuschke said.
While economists expect the rise to stop once the conflict is over, they also predict that it will take until the start of summer before we see a drop in prices.
“I wouldn’t be surprised to see 50 cents more, okay, at the pumps. And if we see more than that, you’ll have to come back and talk to me again,” Gnuschke said.