MIAMI (CBS4) – South Florida’s recent spike in gas prices isn’t coming from the traditional “Supply and Demand” market forces, but rather “Investors” jumping into the commodities markets at the same time a major oil producer threatens to cut exports.
Domestic oil demand is near record lows at the very same time US oil supplies remain at high levels, according to the US Department of Energy.
Miami driver William Ortiz blames speculators for hiking the price of wholesale oil. He says that’s who’s behind the recent spikes in local gas prices. “The politicians better watch out, what are they doing to the investors who are driving up prices?” he said.
Some stations by Miami International Airport are already selling Regular Unleaded for $4.39 a gallon.
Since January gas prices have climbed about 20 cents a gallon here and across the country and average about $3.73 around South Florida.
The latest spikes are being fed by Iran’s warnings to cut oil sales in retaliation for economic sanctions as it develops its nuclear energy program.
Wholesale oil prices are up over $104 a barrel for West Texas crude.
Closer to home, rising energy costs continue to push up consumer prices almost across the board.
With consumer prices up about 3% since last year, overall food and energy costs have risen at their fastest annual rate since 2008: Up more than 6% for energy- related costs and almost 4.5% for food prices.
Local produce buyers say if gas prices keep rising, food costs will keep climbing too following the expected extra fuel surcharges from shippers.
Norman Brothers Produce Manager Suann Suggs says “We’re not seeing it just yet, but it’s coming. It’s still early.”
Stressed Kendall shopper Rosie Duell complains, “I think that’s terrible having to pay extra for fuel products.”
Local shoppers may not know where the extra money’s going to come from to pay for it all, but some are already making plans to save their budgets, like Miami shopper Ernie Lynk.
“If it happens, I already have a plan,” he said. “I’ve got a garden at home and the quality not like here but it will help defray some of the costs”.
Gas prices are expected to keep rising thru the summer, prompting some local consumers to start looking into whether Public Transportation can save them any time or money.
Some oil industry analysts predict $4.00 a gallon gas to be the national average before the summer driving season.
Some analysts now predict gas prices could not only slow the course of the US economic recovery, but also become a major campaign issue as we approach the fall electionss