Handling Soaring Gas Prices

ByMELLODY HOBSON

Aug. 16, 2004 — -- Over the past three weeks, the average price of a gallon of gasoline in the United States rose to a wallet-busting $2.55 a gallon. Monday's weekly gas price survey from the Energy Information Administration shows the largest weekly jump in the average price of a gallon of gas in the history of the report.

Where are gas prices now?

On average, gasoline prices have increased more than 60 percent in the last two years and cost an average of $0.67 more a gallon than just a year ago. However, the price of gas still remains below the all-time high of $3.12 a gallon (adjusted for inflation) last seen in March 1981.

Where are gasoline prices going?

While it is unlikely we are going to experience a major drop in gas prices anytime soon, we should see a little reprieve after Labor Day when summer travelers get off the highways, reducing the demand for gasoline.

How did we get here?

The high price of gasoline can be linked to several things:

Is there anything you can do about it?

Follow these simple guidelines to save money at the pump:

How much does gas cost in Europe?

It is safe to say that a gallon of gas costs more than $5 in Western Europe. (As of May 2005, a gallon of gas averaged about $5.51 in France and $6.36 in the Netherlands.) The reason for the high cost? European countries impose high taxes on fuel in an effort to fund public transportation as well as encourage conservation and fuel-efficient technologies. In fact, the taxes on gas are more than double the underlying cost of the gas in England, the Netherlands and Scandinavia.

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

ABC News Live

ABC News Live

24/7 coverage of breaking news and live events