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All Things Michigan

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Gas Prices Week of 5/15/06

Andrew Norton

The average price for a gallon of gas in Michigan as of today is $2.95. That is about a $0.14 increase from last month. One year ago the average price of regular unleaded gasoline in Michigan was $2.16. We are closing in on the previous all-time high of $3.205 that was set on 9/3/05. That huge price hike was due largely in part because of the devastation of Hurricane Katrina. Now, it is supposedly due to demand outpacing supply.

The Today Show had an interview with someone (the President, I think) of Chevron this morning. My favorite question asked of him was this - "why do gas stations raise their prices when they hear that the price of crude oil has gone up, yet the gasoline in their tanks was purchased at a lower price?" Naturally, the representative from Chevron danced his way right around the question.

It would be different if when the price of crude oil decreases that stations would lower their prices even though the fuel in the tanks was purchased at a higher price. This would be using the same thought process they use when crude oil increases. Of course, that will never happen.

That is the point that folks focus on when they wonder if the big oil companies are price gouging. Are we being gouged or are we finally paying the price for our decades of carefree gas consumption?

Price data courtesy of AAA Fuel Gauge Report.