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Gas prices are going up. We may not see any relief for at least the rest of this year.
According to the gas price tracking site GasBuddy.com, the average nationwide price of regular gasoline has gone up 17 cents per gallon in the past 30 days, and nearly 98 cents per gallon from the same period in 2021.
Colorado’s average gas prices are slightly lower than the national average, but prices are higher in the High Country.
Skyler McKinley of AAA Colorado said several factors are working to drive prices.
The biggest factor is that driving and travel are increasing as the COVID-19 pandemic recedes. Given that fuel prices are driven largely by supply and demand, more demand generally means higher prices.
Tight supplies
Supply is also tight. McKinley said the world’s largest exporters are only hitting about 65% of their production calls. Those countries include Russia — the world’s third-largest oil exporter — and OPEC, the Organization of Petroleum Exporting Countries, which are mostly in the Middle East.
There are also lingering effects the pandemic put on many industries, including oil production and refining. Those business impacts from the pandemic are likely to last for years, McKinley said.
Then there’s the matter of a possible Russian invasion of Ukraine. McKinley said if that invasion happens, the U.S. and its allies are almost certain to impose stiff economic sanctions. That would likely be met with Russian retaliation in the form of shutting off oil exports, McKinley said.
Whether or not the Russian army rolls into Ukraine, McKinley said the rise in prices is likely to continue.
“Coloradans should get accustomed to the idea of $4-plus gas,” he said.
The question then becomes how Vail and Eagle County’s tourist economy might be affected by the new, more expensive cost of loading up the car for a trip to the mountains.
Psychological mileposts
McKinley said there are a couple of psychological mileposts as the cost of fuel increases.
At $3.50 per gallon, people will still take driving trips, McKinley said. But the higher fuel costs might mean staying in less-expensive lodging or eating fast food instead of dining in sit-down restaurants.
At $4, McKinley said it’s likely that people may alter their driving behavior.
That’s likely to affect High Country tourism, McKinley said.
That hasn’t happened yet.
Peter Dann, chief development officer of East West Hospitality, said the firm has been hit by rising natural gas prices. But, he added, the firm hasn’t seen any impact on reservations from those driving to destinations.
Vail Valley Partnership CEO and President Chris Romer, in an email, wrote he doesn’t expect to see much impact from higher pump prices.
Romer noted that current conditions show across-the-board increases in lodging numbers and Interstate 70 traffic.
January traffic at the Eisenhower Johnson Memorial Tunnels this year was about 500 cars per day more in 2022 than the same period in 2021.
“My instinct and the local data tell me we’re going to remain a popular destination (high visitation with real workforce challenges) for the foreseeable future,” he wrote.
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February 17, 2022
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Drivers will soon be paying more than $4 per gallon for gas in Eagle County - Glenwood Springs Post Independent
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