Former Shell Executive Predicts High Gas Prices in Coming Years
Higher demand in Asia could contribute to a spike in gas prices.
Dec. 30, 2010— -- A former Shell executive is predicting that gas prices could reach the $5 mark by the late 2012, just as Americans are seeing a preview of rising prices throughout the nation.
John Hofmeister, the former president of Shell, now the chief executive of a non-profit group called Citizens for Affordable Energy, said he expects the hike by November 2012 mostly because of higher demand for gasoline worldwide -- especially in Asia.
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"There is more demand because the economy is recovering," he said. "There is much more demand in Asia because the economy is growing rapidly."
While demand is rising steadily, the world is struggling to increase production. Demand is approaching 90 million barrels per day, while only 85 million barrels are being produced.
Today, gas prices are averaging at $3.05 a gallon, up 19 cents from just a month ago.
Americans drove 16 billion more miles this year than they did last year.
Some are families who plan road trips as vacations.
Daniel and Bethany Getz, along with their two young children Sienna and Carter, stopped at a gas station in Sylmar, Calif., while on a family road trip from Sacramento to Los Angeles. The rise in gas prices may change the way they vacation in the future.
"With gas prices going up and up," said Getz, "it really impacts the amount we have to spend on vacation."
Their drive back from Los Angeles to Sacramento will cost $103 today, but would have cost them only $88 last year. If Hofmeister's prediction comes true, the same trip will cost them $167, almost double the cost in two years.
"When we looked at prices coming down here -- compared to driving, flying was a lot more expensive," she said. "When the price of gas goes up to $5, it won't be."