Making Sense of Rising Gas Prices

Newswise — Economist Benjamin Liebman, Ph.D., says there are two main factors leading to higher gas prices right now. The first is the approach of the summer driving season. "Gas prices rise during the summer months because American families tend to take road trips during this time, and use more gas to fuel these trips," he says. The second has to do with oil refineries, which convert crude oil into the gas that we put in our cars. "Prompted by environmental concerns, refineries are in the process of switching to cleaner burning blends. Many of these refineries are experiencing production glitches that prevent them from operating at full capacity." So while the demand for gas is on the rise, less is available due to declining production. The combination of these two forces leads to what Dr. Liebman calls a "rub-up in prices," despite falling crude oil prices. Dr. Liebman says the main thing that consumers can do to prevent increasing gas prices is to simply drive less. "Driving at lower speeds helps, and if you're in the market for a new car, look for cars with higher fuel efficiency or a hybrid." Dr. Liebman is an assistant professor of economics at Saint Joseph's University. His expertise lies in international economics and applied microeconomics.