HOUSTON -- The average price for a gallon of regular unleaded is up to $2.99 – that’s a jump of a nickel in the last week, and experts say it could go much higher.
Oil was up 6 percent Monday, and you’ll see the impact over the next few days.
“If the turmoil persists we could see that rise to $3.50 a gallon. If there is a supply disruption in the Middle East you will see $4 a gallon or even higher," said Oil Analyst Andy Lipow.
This time, it is Libya with unrest and crackdowns on protesters.
We’ve been taught to believe that price at the pump is all about supply and demand, but Lipow said that’s not the case.
"In the U.S. we have plenty of gasoline supply for the upcoming driving season and we have a significant supply of oil," he said.
So what gives?
Libya has significantly more impact on oil and gas than any of the other nations facing unrest in the Middle East. That's because it is a significant exporter to Europe. We import 40-percent of our gasoline from Europe.
The price is not about now -- it is about months from now.
"The fear is that will spread not only to countries like Algeria or Morocco, but throughout the Middle East. Saudi Arabia perhaps, Kuwait, Bahrain, Oman and so forth," he said.
That is the worst-case scenario. The impact is massive, because there is little that the U.S. government could do.
The last time gas prices reached $4 a gallon, we were on the fringe of recession -- the biggest worry now is that recovery from that recession could be jeopardized. That's because when consumers tighten up, it affects everything because gas for many is a must, while most other things are not.