Mellody Hobson: How Will Rita Affect Gas and Oil Prices?

Hurricane Katrina sent gas prices -- which were already very high -- soaring even higher. Now Hurricane Rita is bearing down on the beleaguered Gulf Coast. "Good Morning America" financial contributor Mellody Hobson talked about what that could mean for gas and oil prices.

Fast Facts:

Eighteen of Texas's 26 refineries are located on or near the Gulf Coast. Some refineries in Louisiana could also take a hit. In a worst-case scenario, Hurricane Rita could affect nearly 30 percent of America's oil refining capacity.

Crude oil futures rose 60 cents to $66.80 a barrel on the New York Mercantile Exchange on Wednesday.

Heating oil jumped nearly 3 cents Wednesday to about $2.04 a gallon.

What Does It Mean for Gas and Oil Prices?

Hurricane Rita could drive gas back over $3 a gallon. The basic rule of thumb is that for every one dollar increase in the price of a barrel of oil, you will pay an extra 2.5 cents at the pump. A week after Katrina, the national retail price for regular unleaded gasoline jumped 46 cents to hit a record high of $3.07 a gallon. Currently, gas is down a bit to $2.79 a gallon. A direct hit by Rita would send gas soaring again over the $3 mark.

It could also cost more to heat your home this winter. Even before Rita, the government was already predicting a big increase in natural gas and home heating oil prices -- up to a 33 percent increase in heating oil prices in the Northeast and up to a 77 percent increase in natural gas prices in the Midwest. Rita is only going to send those prices higher.

What Can People Do Now to Save on Home Heating Costs?

Check with your utility for lower natural gas prices. If you use natural gas, in some regions there are what they call residential choice programs -- where major utilities are required by law to let you know about competitors' prices. Your utility continues to deliver the gas to you, but you pay the lower price to the supplier. So check online with your local utility. You may find information there about a provider that offers a fixed price for natural gas which would "insulate" you from fluctuations in the market price.

Weatherize your home. By simply caulking, sealing and weatherstripping around all your windows, outside doors or where plumbing, ducting and electrical wiring penetrate exterior walls, floors or ceilings, you can save 10 percent to 25 percent on your heating bill. That equals about $600 if you assume you are going to have a $2,400 bill in 2006 -- real money.

Mellody Hobson, president of Ariel Capital Management (arielmutualfunds.com) in Chicago, is "Good Morning America's" personal finance expert. Matthew Yale and Aimee Z. Daley contributed to this report.

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